Chinese private banks have seized the opportunity provided by the financial crisis to become the preferred choice of high net worth individuals (HNWIs) at the expense of foreign players.
The financial crisis has hardened the attitudes of Chinese HNWIs towards foreign banks, according to Bain & Companys 2011 China Private Wealth Study.
In 2009 the study noted that the financial crisis had impacted the competitive landscape of private banking in China when most HNWIs would still consider selecting foreign banks, although they had become more cautious.
However, the latest 2011 study, of more than 2,500 HNWIs, found that this caution had translated into 85% of HNWIs who use financial institutions for wealth management now selecting domestic banks as one of their wealth management institutions.
Less than 40% of the Chinese HNWI bracket in 2011 said they would choose foreign banks.
The number of Chinese high net worth individuals (HNWIs) is projected to rise to 585,000 in 2011 nearly double the figure for 2008, said the study.
Within this segment the fastest growth is coming from HNWIs with more than CNY100m ($15.4m). HNWIs are defined as those with more than CNY10m in individual investable assets.