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Research Report on Chinese Private Banking Market, 2009

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Report Summary

Private banking is derived from Swiss, specialized in the fortune management business of providing special financial services, promoting the cooperative value between commercial banks and customers and prolonging customer relationship value chains. The concept of private banking came out in China after 2005. In September, 2005, Swiss Friends Bank Co Ltd started its business in Shanghai and brought the concept of private banking to Chinese market. Since 2007, the profits of private banking were ten fold of other retail business. Therefore, more and more domestic banks began to involve in the private banking.

In recent years, many banks announced to set up their private banking centers. It is without doubt for these banks to occupy some rich men gathering places as their focuses, such as Beijing, Shanghai and Shenzhen etc. The customers of private banks from China Merchants Bank Co., Ltd grew by 35% than that in 2008. Compared with less than 0.02% private banking customers in the whole customers of China Merchants Bank Co., Ltd, the total assets of private banks accounted for more than 10%, the highest level in all commercial banks. The private banking of China CITIC Bank also rose fast in 2008. Now its customers of private banking are two thousand. The condition of private bank in China Merchants Bank Co., Ltd is 10 million Yuan (1.46 million USD), but China CITIC Bank is 8 million Yuan (1.16 million USD).

In 2007, Chinese private banking rose. Chinese funded banks mainly concluded Bank of China, China Merchants Bank Co., Ltd, Industrial and Commercial Bank of China Ltd, China CITIC Bank, Bank of Communications, Construction Bank of China and China Minsheng Bank etc. The foreign funded banks concluded Hong Kong and Shanghai Banking Corporation Limited
, Citi Bank, Bank of East Asia, Deutsche Bank Group, Swiss Friends Bank Co Ltd, BNP Paribas, Standard Chartered Bank and Edmond de Rothschild.

Chinese private banks are mainly located in the economically developed areas, such as Shanghai, Beijing and Shenzhen etc. foreign funded banks are in Shanghai and Beijing. Some Chinese funded banks, because of its local advantages, also set their private banks in big cities with huge customer potential, their business spreading a wide area.

By the end of 2008, Chinese millenaries were about 0.5 to 1 million. The reason for uncertain numbers is that Chinese millionaires were accustomed to investment in real estate, such as living houses and shops etc. they expected to benefit from revaluation in real estate, so the numbers fluctuated sharply. The definition of millionaire is that individual floating assets are more than one million USD Except housing.

The global financial crisis, stemmed from the sharp decline of American real estate market, seriously stroke the large European and American banks. Although most private banks escaped from direct hit, they were influenced by the financial fluctuation. The crisis made some investors to transfer their investment to more conservative products, leading to the profit reduction in some private banks.

Taking consideration of the infancy of local financial market, many riches are preferential to manage their fortunes offshore in previous Chinese emerging market. The foreign funded banks occupy the most part of market share. The occurrence of financial crisis makes Asia especially China become the minimal negative influential country and the safest market. In the future, Chinese rich families are even preferential to invest at home, which brings huge development opportunities for Chinese private banking.

In the developed countries, the success of private banking is inseparable with politics, society, economy and law, such as steady currency value, natural advantages of tax rate, long financial history, prosperity in financial market, steady bank systems, sound legal and confidential systems and massive rich experienced financial talents.

By contrast, Chinese private banking market, with huge market potential, needs perfection of supporting infrastructure in its infancy. Chinese private banking market mainly faces the following problems: strictly supervision of finance and the adoption of separate supervises models is unfavorable to the promotion of various businesses; Underdevelopment of financial market (regardless of business tools or means); lack of strong investment bank supports; shortage of necessary systems and organizational structures of private banks.

From the part of Chinese private banking, international financial crisis is not only strikes but also opportunities, on the one hand, the slowdown risk existence in the private banking market, on the other hand, the development opportunities of organizations and talents transferring to Chinese market.

As a whole, Chinese private banking market is still in its infancy and hugely demanded for customers. In two to three years, Chinese private banking market will rise explosively.

The author of this report made a profound investigation and investigation of Chinese private banking, and then wrote this report. Readers can obtain more following information:
- Present situations of Chinese private banking
- Analysis on the market demands of Chinese private banking
- Analysis on the foreign funded banks with private banking in China
- Analysis on the local banks with private banking in China
- Analysis on the factors affecting the development of Chinese private banking
- Analysis on the development trends of Chinese private banking
- Analysis on the influences of international financial crisis on Chinese private banking

Table of Contents

Table of Contents
1 Overviews on China’s Private Banking Market
1.1 Concepts of China’s Private Banking Market
1.1.1 Definition
1.1.2 Service Objects
1.2 Main Characteristics of Private Banking
1.2.1 High Entry Criterion
1.2.2 Service Individuation
1.2.3 Service Privacy
1.2.4 Wholesale of Business
1.2.5 Brand Effect
1.2.6 High Business Profits
1.2.7 Other Characteristics
1.3 Analysis on the Elements of Private Banking
1.3.1 Target Customers
1.3.2 Products and Services
1.3.3 Business Core
1.4 Differences of Private Banking and Fortune Management in China
1.4.1 Differences in Service Objects
1.4.2 Differences in Service Contents

2 Present Situation of Global Private Banking Industry
2.1 Overviews on the Developments of International Private Banking Industry
2.1.1 Changes of Customer Structure
2.1.2 Blurring Boundaries between Private Banking and Various Banking
2.1.3 Challenges from Information Ages to Private Banking
2.1.4 More Attentions paid to the Development of Onshore Private Banking
2.2 Analysis on the Developments of Private Banking in Developed Countries
2.2.1 Analysis on the Profit Factors of Private Banking
2.2.2 Analysis on American Private Banking
2.2.3 Analysis on Swiss Private Banking
2.2.4 Analysis on Singapore Private Banking
2.3 Analysis on the Development Trends of International Private Banking

3 Analysis on Chinese Private Banking, 2009
3.1 Analysis on the Development Environments of Chinese Private Banking
3.1.1 Economic Environments
3.1.2 Policy Environments
3.2 Development History of Private Banking
3.2.1 Analysis on the Origin
3.2.2 Analysis on the Present Market Situations
3.3 Analysis on the Customers and Their Characteristics of Chinese Private Banking
3.3.1 Analysis on the Customer Categories
3.3.2 Introduction of Customer Conditions
3.3.3 Strategies of Customer Categories
3.4 Analysis on the Customer Demands of China’s Private Banking
3.4.1 Overview of the Customer Demands
3.4.2 Service Quality and Customer Relationship Management
3.5 Analysis on the Characteristics of China’s Private Banking
3.5.1 Private Banking being the Competitive Focuses of Various Banks
3.5.2 Concurrence of Development Opportunities and Operation Risks
3.5.3 Huge Market Potential
3.6 Analysis on the Competitions of China’s Private Banking
3.6.1 Competitions among Local Banks
3.6.2 Competitions among Foreign Funded Banks
3.6.3 Competitions between Local Banks and Foreign Funded Banks
3.6.4 Competition Trends

4 Analysis on the Factors Affecting the Development of China’s Private Banking
4.1 Analysis on the Limiting Factors Affecting the Development of China’s Private Banking
4.1.1 Talent
4.1.2 Products
4.1.3 Services
4.2 Analysis on the Driving Factors Affecting the Development of China’s Private Banking
4.2.1 Customers’ Demands: Increasing Number of millionaires in China
4.2.2 Looking For New Profit Growth Points in Commercial Banks
4.3 Major Problems for the Development of Private Banking in China
4.3.1 Blurring Development Models
4.3.2 Business Limitations because of Divided Operation
4.3.3 Lack of Effective Marketing Systems

5 Analysis on the Major Operation Points in China’s Private Banking
5.1 Analysis on the Evaluations of Customers in China’s Private Banking
5.2 Analysis on the Major Business Orientations of China’s Private Banking
5.2.1 Cash Management
5.2.2 Broking and Fiduciary Services
5.2.3 Investment Management
5.2.4 Personal Credit
5.2.5 Business Financing
5.2.6 Individuation Services
5.3 Analysis on the Value Chains of China’s Private Banking

6 Analysis on the Fiduciary Services of China’s Private Banking
6.1 Analysis on the Fiduciary Services and China’s Private Banks
6.1.1 Characteristics of Fiduciary Services
6.1.2 Applications
6.2 Present Situations and Problems of Fiduciary Service Application in China’s Private Asset Management
6.3 Recommendations for Developing Fiduciary Services in China

7 Analysis on the Foreign Funded Banks of China’s Private Banking Market
7.1 Swiss Friends Bank Co Ltd
7.1.1 Company Profiles
7.1.2 Analysis on Private Banking Business in China
7.1.3 Development Strategies
7.2 Edmond de Rothschild Bank
7.2.1 Company Profiles
7.2.2 Analysis on Private Banking Business in China
7.2.3 Development Strategies
7.3 Citi Bank
7.3.1 Company Profiles
7.3. Analysis on Private Banking Business in China
7.3.3 Development Strategies
7.4 Deutsche Bank Group
7.4.1 Company Profiles
7.4.2 Analysis on Private Banking Business in China
7.4.3 Development Strategies
7.5 Standard Chartered Bank
7.5.1 Company Profiles
7.5.2 Analysis on Private Banking Business in China
7.5.3 Development Strategies
7.6 Hong Kong and Shanghai Banking Corporation Limited
7.6.1 Company Profiles
7.6.2 Analysis on Private Banking Business in China
7.6.3 Development Strategies
7.7 Bank of East Asia
7.7.1 Company Profiles
7.7.2 Analysis on Private Banking Business in China
7.7.3 Development Strategies
7.8 Summary of Private Banking Business of Foreign Funded Banks in China

8 Analysis on the Local Banks of China’s Private Banking Market
8.1 Bank of China
8.1.1 Company Profiles
8.1.2 Development of Private Banking Business
8.1.3 Development Strategies
8.2 China Merchants Bank Co., Ltd
8.2.1 Company Profiles
8.2.2 Development of Private Banking Business
8.2.3 Development Strategies
8.3 China CITIC Bank
8.3.1 Company Profiles
8.3.2 Development of Private Banking Business
8.3.3 Development Strategies
8.4 Industry and Commercial Bank of China
8.4.1 Company Profiles
8.4.2 Development of Private Banking Business
8.4.3 Development Strategies
8.5 Bank of Communications
8.5.1 Company Profiles
8.5.2 Development of Private Banking Business
8.5.3 Development Strategies
8.6 Construction Bank of China
8.6.1 Company Profiles
8.6.2 Development of Private Banking Business
8.6.3 Development Strategies
8.7 China Minsheng Bank
8.7.1 Company Profiles
8.7.2 Development of Private Banking Business
8.7.3 Development Strategies
8.8 Overviews on Private Banking Business in Local Banks

9 Analysis on the Developments of China’s Private Banking Market, 2009-2010
9.1 Prediction of Market Perspectives of China’s Private Banking Market
9.2 Opportunities and Challenges from International Financial Crisis for China’s Private Banking Market
9.3 Recommendations for the Development of China’s Private Banking Market

Selected Charts
Chart Analysis on the Millionaire Numbers in China
Chart Comparisons of Private Banking and Fortune Management Services in China
Chart Development History of Chinese Private Banking
Chart Major Foreign Funded Banks with Private Banking
Chart Major Local Banks with Private Banking
Chart Analysis on the Customer Numbers of Chinese Private Banking, 2008
Chart Analysis on the Banks with Private Banking in Shanghai
Chart Analysis on the Banks with Private Banking in Beijing