Foreign banks chase China's 'super rich'

• Source: Global Times
• [10:22 July 15 2010]
• Comments

Jonathan Larsen, head of consumer banking and global cards for Citigroup Asia Pacific (left), shakes hands with Anand Selvakesari, executive vice president of Citibank (China) at a press conference in Shanghai Wednesday. Photo: Citibank

By Zhou Mi

Foreign banks are rushing to enhance their services for the growing ranks of China's "super rich," although they must overcome the unique characteristics of the Chinese market, as well as competition from local banks.

Citibank announced Wednesday in Shanghai that it plans to enhance its offering of tailored wealth management services to customers on the Chinese mainland who hold a minimum of 8 million yuan ($1.18 million) in personal assets. The move puts the bank in line with AIG Bank and Standard Chartered, which started private banking businesses for the super rich in China in 2005 and 2007 respectively.

The number of people with at least 8 million yuan in personal liquid assets in China grew at an average of 20 percent annually from 2006 to 2009, to reach 300,000 people by 2009, according to a report released by Citibank Wednesday.

"As many rich people in China are identified by their property assets and their stakes in companies, the number whose fortune surpasses 8 million yuan ($1.18 million) could rise to 2 million people if those assets are counted," Anand Selvakesari, executive vice president of Citibank (China) said at the press conference Wednesday.

A report released in May by international auditing firm Pr i c ewa t e rhous eCoope r s (PwC) said that many foreign banks recognize that wealth management will be an important component in their future strategic development in China and that foreign banks are advancing quickly into the market this year.

However, foreign banks find they have a complex situation to deal with in China when it comes to measuring the assets for their clients.