This is a sponsored article from China Merchants Bank Private Banking.
On the evening of 25 August 2023, China Merchants Bank Private Banking unveiled its semi-annual performance report for 2023, showcasing a steady growth trajectory.
As of the end of the first half of the year, the number of clients at China Merchants Bank Private Banking exceeded 140,000, a 6.21% increase compared to the end of the previous year. The total assets managed by the private banking sector saw a growth of 5.89%, securing its position as the leader in the Chinese private banking industry. It is noteworthy that this growth was achieved amid a backdrop of multiple pressures on the Chinese economy and a slower-than-expected recovery in the capital markets.
During the subsequent earnings conference, the senior management of China Merchants Bank held high expectations for the private banking business. The bank’s president, Wang Liang, stated that the private banking sector has “established a very good competitive advantage” within the industry.
With over 16 years of development, China Merchants Bank Private Banking has built a comprehensive service system that caters to the diverse needs of clients, encompassing individual, family, corporate, and societal responsibilities. This includes key business areas such as wealth management, family succession, corporate investment and financing, and charitable activities.
In the wealth management sector, China Merchants Bank Private Banking focuses on product systems and asset allocation. Since 2008, the bank has initiated an open product platform, introducing industry-leading asset management institutions to offer a diverse range of products to clients.
Leveraging years of accumulated insights into products and managers, the bank has constructed a cross-market, all-category, and widely covered product system, along with a rigorous and stable product evaluation system. The evaluation criteria include historical performance, scale of assets managed by the manager, and institutional operational stability by conducting due diligence and on-site reviews to strictly control product risks.
Currently, over 10,000 products are available on the platform. In the sales process, a professional team of investment advisors has been established to tailor asset allocation service plans according to the individual risk and return preferences of clients.
In terms of family succession, China Merchants Bank Private Banking is focused on building a strong presence in the family trust segment. Nearly 70% of private banking clients are business owners and senior executives. As they age, the demand for wealth protection and orderly inheritance has surged, making family trusts an ideal tool to meet these needs.
In recent years, the family trust market in China has experienced explosive growth. From 2019 to 2021, the number of family trusts handled by China Merchants Bank Private Banking each year equalled the total number from all previous years, and in 2022, it surpassed the total of the past three years. According to the “2023 China Private Wealth Report”, over 20% of high-net-worth individuals have established family trusts, and nearly 50% are considering setting one up.
China Merchants Bank was the first institution in China to implement private banking family trusts. With over 10 years of development, by the end of the first half of 2023 it had initiated over 11,000 family trust projects, accumulating a wealth of experience.
In the corporate investment and financing sector, the majority of private banking clients are entrepreneurs, with a high demand from the enterprises they represent. China Merchants Bank Private Banking has strengthened cooperation with corporate finance and investment banking sectors, integrating resources from subsidiaries and external partners. This not only meets the wealth management, planning, and succession needs of entrepreneurs but also satisfies the financial demands of the enterprises behind them.
Unlike foreign private banks, private banks in China generally fall under the retail banking sector, separate from corporate financial services. To integrate internal service resources, China Merchants Bank implemented a series of organisational innovations, introducing experts from corporate finance and investment banking into the private banking team, forming a frontline force that integrates retail banking with corporate finance and investment banking, offering clients comprehensive solutions that integrate individual and corporate elements.
In the community philanthropy sector, China’s high-net-worth individuals are actively responding to national policies, practising philanthropy, giving back to society, and integrating wealth management with philanthropic planning. This also requires private banks to provide corresponding services. In March of this year, China Merchants Bank Private Banking released the “2023 China High-Net-Worth Individuals Philanthropy Research Report”, indicating that high-net-worth individuals have a strong willingness to fulfil social responsibilities, but face challenges in selecting charitable projects and establishing frameworks.
China Merchants Bank Private Banking established a professional charitable advisory team, closely collaborating with charitable organisations. Leveraging the bank’s strong local resources and decades of experience in rural poverty alleviation, it assists clients in finding charitable projects that align with their interests. Simultaneously, it utilises its rich experience in trust and foundation structure establishment to formulate the best charitable structure plans for clients.
As of the first half of 2023, China Merchants Bank Private Banking has assisted clients in establishing five special funds, over ten charitable trusts, over ten family trusts with charitable clauses, and special care trusts.
China Merchants Bank’s robust fintech capabilities have provided powerful support for business expansion in the aforementioned areas. Private banking clients can use the exclusive Premium Version interface on the China Merchants Bank App, designed according to the usage habits and interaction needs of high-net-worth clients, allowing them to complete a wide range of transactions online, including private equity product transactions.
Fintech has also greatly enhanced the operational efficiency of the business. For instance, the establishment of family trusts, which originally relied on manual operations by professionals and could take several months, can now be completed in as little as three days after digital upgrades, greatly improving project initiation efficiency.
With the development of society and the economy, the personal needs of China’s high-net-worth individuals are increasingly integrated with family, corporate, and societal responsibilities. China Merchants Bank Private Banking will continue to adhere to systematic thinking, focusing on client needs to build a systematic advantage.
This is a sponsored article from China Merchants Bank Private Banking.