New research suggests the vast majority of
China’s high net worth individuals (HNWIs) prefer to use domestic
banks as one of their wealth management institutions, with less
than 40% choosing foreign banks.
Bain & Company’s 2011 China Private
Wealth Study found 85% of HNWIs who use financial institutions
for wealth management now select domestic banks above foreign
institutions. HNWIs are classed as those with more than RMB10m
($1.5m) in individual investable assets.
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Among these HNWI, 60% select domestic banks as
their primary wealth management institutions.
Chinese clout
China’s domestic banks are rapidly increasing
their wealth management services led by local big hitters including
China Merchants Bank (CMB), a sponsor of the Bain study, Industrial
and Commercial Bank of China and Bank of China.
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By GlobalDataIn 2010, CMB recorded RMB400m net profit from
private banking business. The assets and customer base of the
private banking portion are forecast to grow more than 35%
year-on-year in 2011, according to a newswire interview with CMB
vice president Ding Wei.
Bain & Co, who will be presenting an
extended version of the research at PBI’s Hong
Kong Forum on 11 May in Hong Kong, found the number of
China’s super-wealthy, high net worth individuals with more than
RMB100m in assets, is the fastest growth wealth segment.
HNW numbers rising, but how
much?
The study estimates the number of Chinese
HNWIs is projected to rise to 585,000 in 2011, nearly twice as many
as in 2008, although almost half the 960,000 Chinese HNWI quoted by
the 2011 Hurun Report.
The research, in collaboration with CMB, was
based on 2,600 effective questionnaires with Chinese HNWI and more
than 100 in-depth interviews with private bank customers, other
Chinese HNWIs, relationship managers and industry experts.
