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SHANGHAI, Aug. 7 -- CHINA Merchants Bank has launched private banking services in the competition with other banks to attract the country's increasingly wealthy citizens.
The Shenzhen-based lender opened its first outlet for private banking in its headquarters city yesterday, targeting clients with financial assets of at least 10 million yuan (US$1.32 million).
The bank is now preparing for a similar outlet in Shanghai, said the Shanghai branch, which declined to disclose details.
The 1,200-square-meter private-banking outlet in Shenzhen offers professional consultants who can help clients with family financial planning, education, property, tax and legal issues.
Merchants Bank, the country's sixth-biggest lender, established what it called a "diamond workshop" in its headquarters in 2005 to serve high-net-worth clients with assets exceeding five million yuan to pave the way for the new service.
Private banking - which is at the top of the pyramid of banking services - requires at least US$1 million in assets. In the United States, private-banking services earn an average profit of 35 percent and produce yearly growth of 12 percent to 15 percent.
The Shenzhen-based lender is the first domestic joint-stake lender and the second Chinese bank to enter the private banking sector.
The Bank of China kicked off its private banking services in Shanghai in March, as the first domestic bank to follow the trend set by overseas rivals such as Citibank and BNP Paribas.
BOC teamed up with Royal Bank of Scotland in offering the private banking services in Shanghai and Beijing.
China Citic Bank has also shown an interest in the market.
The Chinese mainland last year was home to 345,000 people who had a net worth of US$1 million, up from 2005's 320,000, said a report by Capgemini SA and Merrill Lynch & Co.
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