Local Chinese banks are dominating the private banking market in China, but are struggling to perform in the offshore stakes, new research suggests.
"Within the onshore market the Chinese banks have become the preferred service provider for HNWI in China for domestic onshore asset management," Bain & Co’s Jenifer Zeng, one of the authors of China’s Private Wealth Report 2013, told PBI in an interview.
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This dominance on the local scene by Chinese banks hasn’t corresponded to offshore banking, with clients looking to the established international banks for their foreign requirements.
"In the offshore market they are looking for private banks that can offer access to different product options and locations, as well as professionalism," said Zeng.
With foreign markets such as Hong Kong, Europe, US, Singapore and Australia becoming increasingly vital, Chinese HNWIs are opting for the major foreign players to service these needs.
"You can clearly see there is the domestic onshore market, and then there is extension to the offshore market," said Zeng.
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By GlobalDataThis current overseas dominance of offshore banking is not going unnoticed, with Chinese banks beginning to reclaim ground.
Local banks are increasingly making the most of their domestic relationships, and using offshore platforms to allow clients access to broader markets, said Zeng.
Private banking in China has grown quickly in recent year to take advantage of $13trn of wealth present in the country in 2012, said Bain. Of this $13trn, wealth high net worth individuals (HNWIs) account for 25%, or $3.5trn, of investable assets.
Despite the relative youth of the private banking sector in China, Zeng said the industry has matured quickly, and clients are highly sophisticated and well educated on what they need.
Sameer Chishty, Partner at Bain &Co and Co-head of the firm’s Financial Services Practice for Greater China will be presenting findings from the China’s Private Wealth Report 2013 at PBI’s Hong Kong Forum.
The forum takes place on the 4 June 2013, at the Grand Hyatt Hong Kong and will discuss transparency in the wealth market, investment strategies and meeting clients technological needs in private banking.
Contact Rosemary Pang to reserve your place.
