HSBC targets wealthy banking on mainland
Updated: 2008-04-01 07:27
(HK Edition)
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HSBC Holdings Plc, Europe's largest lender, launched private banking services on the mainland yesterday as overseas banks including Citigroup target the country's fast-growing market for services to wealthy clients.
Mainland regulators have given HSBC approval to offer private banking services in Shanghai, Beijing and the southern city of Guangzhou, bank officials said.
It will target individuals with a minimum net worth of $10 million, officials said, and the minimum initial deposit for an account will be $1 million.
HSBC and other foreign lenders are targeting the mainland's rapidly growing wealthy class, as full deregulation of the banking industry has allowed them to conduct local-currency business with local individuals.
The British bank forecasted that by 2011 there will be 16 million high-net-worth individuals on the mainland, with $6.2 trillion in total assets.
HSBC China Chief Executive Richard Yorke said at a news conference that the mainland's macroeconomic tightening will not hurt the bank's business and that the mainland remains on track for strong growth despite the subprime debt crisis rocking the US economy.
"We are very comfortable with the amount of lending we are able to make, and we are working within the amount of lending we are given. Overall, the tightening is a good thing for the economy, and our overall business won't be affected," he said.
He said the company plans to add up to 2,500 staff on the mainland this year.
"There won't be any reduction in our commitment to grow on the mainland," he said.
Annual economic growth of more than 10 percent has created more than 345,000 millionaires (US$) on the mainland, according to a Merrill Lynch report.
"The creation of wealth on the mainland is a unique phenomenon in that greater wealth is being generated by a relatively younger age group compared with the rest of the world," said Monica Wong, the chief executive of HSBC private bank in Asia.
HSBC posted more than $1 billion in pretax profits on the mainland last year, including strategic investments. HSBC holds nearly a one-fifth stake in Bank of Communications and is the largest single shareholder in Ping An Insurance.
HSBC said yesterday that its mainland unit earned a pretax profit last year of $165 million, excluding strategic investments, up 28.7 percent from the previous year.
HSBC rivals CitiBank and Standard Chartered have already started private banking businesses on the mainland, while Bank of East Asia has said it plans to launch such services in the second quarter.
Reuters
(HK Edition 04/01/2008 page2)