HSBC launches private banking in China

HSBC launches private banking in China
Reuters - Monday, March 31 06:22 am

SHANGHAI (Reuters) - HSBC Holdings , Europe's largest lender, launched private banking services in China on Monday as foreign banks including Citigroup target the country's fast-growing market for services to wealthy clients.

Chinese regulators had given HSBC approval to offer private banking services in Shanghai, Beijing and the southern city of Guangzhou, the bank said.

It will target individuals with a minimum net worth of $10 million (5 million pounds), it said, while the minimum initial deposit for an account will be $1 million.

HSBC and other foreign lenders are targeting China's rapidly growing wealthy class, as full deregulation of the country's banking industry has allowed them to conduct local-currency business with Chinese individuals.

"The creation of wealth in China is a unique phenomenon in that greater wealth is being generated by a relatively younger age group as compared to the rest of the world," Monica Wong, HSBC private bank chief executive for Asia, said in a statement.

Annual economic growth of more than 10 percent has created more than 345,000 U.S.-dollar millionaires in mainland China, according to a Merrill Lynch report.

HSBC, which has set up a wholly owned China unit, posted more than $1 billion in pretax profit in China last year.

HSBC rivals CitiBank and Standard Chartered have already started private banking businesses in China, while Bank of East Asia has said it planned to launch such services in the second quarter.

Local banks, including Industrial and Commercial Bank of China (ICBC) and Bank of Communications , in which HSBC holds a stake, have also joined the competition to offer services for wealthy Chinese clients.