The Bank of China became the first Chinese bank to launch private banking services in London on Tuesday, in a bid to tap into the burgeoning pool of wealthy individuals living in and traveling to the British financial hub.
Private banking is the name given to banking, investment, and other tailor-made services offered to wealthy clients.
In recent years, the growing number of wealthy individuals and especially the large pool of rich Chinese businesspeople in London, has attracted the attention of British banks, including HSBC and Coutts, that have targeted clients by recruiting Mandarin-speaking client managers, among other tactics.
The Bank of China's new service is aimed at people who are in the United Kingdom to study, buy property, shop, or invest. Its service package includes mortgages, shopping discounts at luxury venues, targeted help for international students, and legal, tax, and investment advice.
Bank of China has not said how large a deposit will need to be in order for customers to qualify for the private banking service. Other services insist that clients have a minimum of between 0,000 and million.
The number of wealthy Chinese families is expected to grow to 3.88 million by the end of 2020, from 2.07 million in 2015, according to a report last year by Industrial Bank Co in China and The Boston Consulting Group.
Many people from these wealthy Chinese families end up studying or investing in the UK. Earlier this month, the estate agent Knight Frank said Chinese buyers now account for around 20 percent of new residential property transactions in London. Chinese nationals also accounted for 35 percent of all student visas granted in 2016, some 49,700.
The Bank of China is providing legal, tax, and investment advice to its private banking clients together with the British investment management companies Quilter Cheviot and Standard Life Aberdeen.
Scott Stevens, head of business development at Quilter Cheviot, said the partnership is a natural choice because Bank of China is a significant player in the banking and mortgage services sectors in the UK.
Bank of China started providing private banking services in China in 2007. Over the years, it has extended the service to non-mainland and overseas markets, including Hong Kong, Macau, and Singapore.
Bank of China's new service in the UK has also already attracted keen collaboration interest in London.
"It is very exciting that BOC is opening their private banking businesses here in the UK," said Chris Donegan, a partner and chief risk officer at the UK subsidiary of the Chinese asset management company Hywin Wealth. "It is a great vote of confidence and reflects the demand that is beginning to form among Chinese clients for a banking provider that understands them."
Donegan said Hywin is keen to become a partner for Bank of China's private banking service, helping its clients invest their money into suitable products.