2020 marks the 17th year of Euromoney’s Private Banking and Wealth Management Survey – a qualitative peer review of the best in private banking, by region and by areas of service. The survey was completed by 2,332 private bankers and wealth managers, without self-nominations, to identify the firms they consider to be their top competitors. In China, once again, China Merchant Bank (CMB) swept the board.
CMB opened its PB division in 2007. In February 2020 it was awarded Euromoney’s Best Private Bank in China for the tenth time (seventh across Asia-Pacific), and won the first place in 15 sub-fields, up from last year, when it won all 12 China awards.
A habit of success
Of the world’s 2,604 billionaires, more than 705 live in the US, but the second-largest population of 285 call China home.
While private banks were born out of the need to manage the wealth of the upper classes in Europe and North America more than 300 years ago, Asia has seen rapid development in the past decade, as its economy has surged and elevated thousands to super-rich status, with China at the heart of the change.
CMB has lead the way in meeting this market’s evolving needs, and has worked with analysts Bain & Co to track Chinas’ PB evolution for more than a decade. The bank has a storied history in Chinese private banking.
On August 6, 2007, CMB's first private banking center opened in Shenzhen, and by 2010, CMB PB achieved a profit of Rmb400 million for the first time.
The bank – since 2015 operating the largest private bank in China and the seventh in Asia – has grown to more than 1,300 wealth managers, catering to 81,674 wealthy clients via 79 private banking centres and 61 wealth management centres in locations including Hong Kong, New York, Los Angeles, Singapore, Sydney, London and Luxembourg.
To date, CMB’s PB clients hold Rmb2.23 trillion ($320 billion) in assets with the bank, the highest assets under management among private banks in China, and the bank is rightly proud of its reputation for rapid response, attentive personal care and wide range of global products and services.
Family funds and future planning
While much of the wealth management space in Europe and North America concentrates on retaining wealth for ‘Old Money’ stretching across many generations, in China and Asia more broadly the youth of the market demands a greater focus on more recent wealth, even within the context of family offices.
CMB launched a family office service for ultra-high net-worth individuals in 2012, one of the first to do so in China. Around 5,000 clients pass the minimum of Rmb500 million in assets managed by the bank to benefit from the service.
By December 2019, CMB was working with nearly 1,200 families in China
In 2013, the bank added more to the inheritance family office service, providing personalized wealth protection and inheritance plans for clients, encompassing family trusts, wealth inheritance, tax planning, legal consultation and insurance planning.
Five years after becoming the first in China to help a client set up a family wealth inheritance trust, by December 2019, the bank had helped, or was working with, nearly 1,200 families in China and abroad to set up trusts, which in total have more than Rmb30 billion in assets under management.
Yet Euromoney data shows that Asian private bankers are agreed that existing family offices do not represent the immediate future of wealth management in Asia. They are instead prioritizing front office investment, with 43% focused on improved technology and processes.
This effort to become more agile and accessible could well be a nod to the next generation of entrepreneurs that Asian PBs consider twice as promising as family offices for new opportunities. Indeed, more than half (51%) of Asia’s PBs are setting their growth projections by new business rather than current clients, however wealthy and ambitious.