Private bankers eye China’s millionaires

Private bankers eye China’s millionaires

BEIJING: The number of US-dollar millionaires in China is expected to nearly double in five years, luring private bankers eager to help them invest an expected combined wealth of more than US$7.6 trillion (S$10.6 trillion) by 2013, Boston Consulting Group (BCG) said yesterday.

Global wealth declined last year for the first time since 2001, the consultancy said, but the number of Chinese individuals with household financial wealth of more than US$1 million each may grow to 788,000 by 2013 from 417,000 last year.

‘We believe that China’s wealth market offers an attractive window of opportunity for banks,’ Mr Frankie Leung, a BCG partner in Hong Kong, told reporters in Beijing.

‘How banks should act to capture the opportunities and establish competitive positions would be a key strategic issue to explore.’

Foreign banks, including HSBC Holdings, Citigroup and Bank of East Asia, have all started private banking businesses in China, competing for affluent clients with local rivals such as Bank of China.

According to the consultancy’s definition, financial wealth includes cash, equities and bonds, but excludes real estate and privately owned enterprises.

Globally, total assets of rich individuals declined by 11.7 per cent to US$92.4 trillion last year due to the global financial crisis, the first drop since 2001, but BCG expects growth to resume over the next few years.

‘It will take roughly five years for the wealth pools to recover from the crisis and to reach a level that is comparable to wealth growth in 2007,’ said Mr Holger Michaelis, a partner and managing director of the firm.

He added that the financial crisis has made rich people abandon complex products in favour of simple, less risky investments to protect, rather than grow their wealth.

REUTERS

Source : Striats Times - 20 November 2009

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