China Minsheng Banking Corporation’s (CMBC) Hong Kong unit will open a new private banking centre on 28 June, as part of the Beijing-based lender’s plans to become one of the five largest Chinese private banks in Hong Kong.
The “private bank and wealth management centre” will take up a quarter of a floor at Two IFC, says Peter Hu, MD and head of wealth management at CMBC’s Hong Kong branch, who adds that this marks “a good start” to CMBC’s three-year plan for its private bank in the city.
“In the coming three years, we will focus on building up our scale from the current HK$10 billion in assets under management, to become a top five among our Chinese peers in Hong Kong,” Hu tells Asian Private Banker, adding that the lender aims to have 50 bankers within its private banking division in Hong Kong, from 14 currently.
The bank will take a gradual approach to hiring, with four new relationship managers in the pipeline at present, says Sunny Ho, CMBC’s private banking head in Hong Kong.
The lender’s private banking team in Hong Kong has been sharing office space with its retail and corporate banking divisions. The new centre – which will be located one floor above these offices in Two IFC – will be a dedicated private banking space.
CMBC sources most of its high net worth clients from the bank’s onshore operations in Mainland China, according to Ho.
The group has nearly 16,000 private banking clients in China, each with minimum assets of CNY 8 million, says Ho.
Hu adds that unlike some Chinese state-owned banks in Hong Kong, CMBC does not have an existing local client base in the city. “An existing local client base here could be a legacy, while sometimes, a burden,” he says.
Organic growth preferred
Meanwhile, the private banking unit has no plans for acquisitive growth at this stage, according to Ho. “Minsheng has its own path in terms of products, given the huge difference of onshore clients’ demands,” Ho says.
He adds that products that offer capital protection, which are hotly sought after among Chinese clients, are scarce in Hong Kong. As such, the bank will look for partnerships with Chinese asset managers and insurance providers over the next three years.
Hu says the private bank will offer more international solutions when “customer satisfaction” has been well established.
CMBC International, a wholly-owned subsidiary of CMBC, took a stake in multi-family office Carret Private Investments last year.
CMBC’s onshore private bank managed CNY 296.7 billion at the end of last year, up around 9% from 2015, according to the bank’s 2016 annual report.