By George Chen - Analysis
SHANGHAI (Reuters) - China's booming economy is creating more than 70 millionaires a day, but foreign banks don't have enough products, client managers or offices to tap into the market for top-end private wealth services.
Banks including Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) and Standard Chartered Plc (2888.HK: Quote, Profile, Research, Stock Buzz) (STAN.L: Quote, Profile, Research, Stock Buzz) know the world's fourth-largest economy holds huge potential for private banking, but weak industry rules, strict foreign exchange controls, too few branches and a lack of expertise mean it will take years to reap profits.
"Market conditions for private banking business in China are still very immature," Shanghai Pudong Development Bank(600000.SS: Quote, Profile, Research, Stock Buzz) President Fu Jianhua told the Reuters China Century Summit.
"Almost every bank wants to get top-end customers, but no matter whether the banks are Chinese or foreign, the problem is whether we have enough professional private bank client managers to offer top-end services to customers," he said.
The limited range of products on offer due to China's highly regulated foreign exchange system is another obstacle.
"We are just in the start-up stage," Christine Ip, head of China consumer banking at Standard Chartered, said at the summit.
"There are not too many products we can offer, unlike in a mature market like Hong Kong, Singapore, or even Korea."
Some private banking units of foreign lenders in China act more as representative offices, as overseas lenders are not yet allowed to help individual Chinese clients invest directly in overseas capital markets. Continued...
© Thomson Reuters 2008. All rights reserved.
| Global Environment | Oct 06 - 8, 2008 | Energy |
| Autos II | Sep 30 - Oct 01, 2008 | Hotels/Casinos |
| Restructuring | Sep 22 - 26, 2008 | Financial Services/Exchanges |
| Autos | Sep 15 - 17, 2008 | Autos |
| Russia Investment | Sep 08 - 9, 2008 | Country Summits |
