BNP launches private bank for millionaires in China

Shanghai: France's top lender BNP Paribas launched a private banking business in China yesterday, targeting the fast-expanding group of millionaires in the world's fourth-largest economy.

The Paris-based bank said the minimum assets of its private bank clients in China would be $1 million.

China has 250,000 dollar-millionaire households so far, the sixth-highest number in the world, said Michel Longhini, BNP's chief executive for private banking in Asia, citing a research report by the Boston Consulting Group.

"If we can get one tenth here, it will be very nice," said Longhini on the sidelines of the launch ceremony for the private bank in Shanghai. In Asia, BNP has 125,000 private banking clients, including 7,000 in India, said Longhini.

"China has huge potential and we are very, very confident in the private bank market," said Claude Haberer, chief executive of BNP's private banking business in Hong Kong and North Asia. "The time has come for wealthy people in China to diversify their assets," Haberer said, adding that the growth rate of the population of Chinese millionaires was about 15 per cent per year.

China has roughly $2 trillion in personal savings, and millions of its emerging middle class are looking for more lucrative investment opportunities than regular bank deposits. Many global rivals of BNP, including top US bank Citigroup, have set up representative offices for private banking in China, but most of them have said they are still studying the market rather than conducting full-fledged business.

Consolidation

BNP bought a 19.2 per cent stake in Nanjing City Commercial Bank near Shanghai for $87 million last October, a signal that the French bank was keen to grow its banking business with both corporate and personal clients in China. Asked if BNP would cooperate with Nanjing Bank in private banking business, Haberer replied: "Of course."

Beijing has pledged to open its banking sector wider to foreign lenders in December, part of commitments to the World Trade Organisation when China joined in 2001. Foreign banks will be allowed to offer yuan-denominated services to local residents.

Currently, BNP's private bank can only be classified as a department of its Shanghai branch, so there are still some restrictions on its business in China, said James Wang, head of BNP's private bank in Shanghai. "Our Shanghai branch is allowed to serve all clients in China but for our private banking business, we cannot go out of Shanghai to approach clients, though clients can go to our Shanghai branch for the service," said Wang.