HSBC will open its first private banking branch in Shanghai to target the rising number of high net worth clients while its partner Bank of Communications has plans to trial the service at its existing branches in the city.
A spokeswoman at HSBC Bank (China) Co confirmed that the bank will announce the opening soon . The bank has already set up a private banking representative office in Shanghai.
In fact the bank launched its first private banking branch in Guangzhou last month and has gained regulatory approval to open a private banking branch in Beijing, South China Morning Post reported earlier.
HSBC has seen pre-tax profit at its private banking division rise 24 percent last year to US$1.5 billion, contributing 6.2 percent to the group's total earnings.
Besides Shanghai, BoCom will also start the services on trial basis in its existing branches in Beijing, Shenzhen, Hangzhou and Guangzhou to serve top-end clients who have financial assets worth more than US$2 million, Dicky Yip, executive deputy president of the bank said yesterday.
BoCom's top five percent retail clients already contribute to three quarters of its total retail banking business in terms of profit and turnover.
The Chinese mainland has 345,000 millionaires who enjoyed a net worth of at least US$1 million in 2006, up from 320,000 in 2005, a report by Capgemini SA and Merrill Lynch & Co.
Shanghai-based BoCom will tap its overseas expertise in Hong Kong and hire third party wealth management companies to serve the high net worth clients.
The service is under its existing wealth management brand OTO, which requires clients to have minimum assets valued at 500,000 yuan (US$70,822).