Breaking New Ground In The Chinese Wealth Market

With the expansion of its onshore private banking business in mainland China earlier this year, HSBC has made clear its commitment to one of the world’s largest and fastest-growing wealth markets. Combined with its well-established offshore business, HSBC Global Private Banking (GPB) is now able to seamlessly deliver the group’s comprehensive suite of solutions and access to its international network to the mainland’s high net worth (HNW) and ultra-high net worth (UHNW) families.

The expansion in mainland China is integral to the bank’s bold ambition to be Asia’s leading wealth manager, says Siew Meng Tan, Regional Head of HSBC Global Private Banking, Asia Pacific. “Mainland China represents the largest and fastest growing wealth pool in the world. If we want to be Asia’s leading wealth manager, we need to be able to leverage this huge opportunity in front of us,” she says.

Research shows that by 2025, the total wealth of Chinese households is projected to grow by more than 50%, while the number of HNW individuals is also expected to rise to five million.

As the needs of Chinese HNW and UHNW individuals become more sophisticated, in particular those of the younger generation, they are seeking banks that can provide them with international and professional insights and expertise to meet their increasingly complex needs. By marrying expert local knowledge with global connectivity, HSBC is ideally suited to fill this gap.

“The internationally minded younger generation want the views and vision of international financial institutions like us to give them global perspectives,” explains Jackie Mau, Head of Global Private Banking, HSBC China.

Expanding Services to Meet Rapidly Growing New Demands

HSBC expanded its Chinese onshore private banking business in May this year, establishing dedicated teams in the Tier 1 cities of Beijing, Shanghai, Guangzhou and Shenzhen. It further extended its business to Chengdu and Hangzhou this October, making it the first international bank to set up a dedicated private banking service team in western China, while strengthening its service capabilities in the Yangtze River Delta region where successful entrepreneurs, especially in the dynamic digital and technology sectors, are creating new wealth and demand for wealth management is growing rapidly.

“Many of our Chinese clients are already banking with us offshore, but an average 80% of their wealth is onshore, so it was a very natural opportunity for us to support them with an onshore presence, and provide more professional and private banking services to help them manage their onshore wealth and family needs in China,” says Mau.

With an enhanced presence in mainland China, HSBC can now offer each of its private banking clients a dedicated Relationship Manager and Investment Counsellor who can help them achieve a more robust asset allocation, as well as create tailor-made solutions.

HSBC Global Private Banking also works closely with the group’s commercial bank and insurance arm in mainland China, as well as HSBC Qianhai Securities, to deliver solutions across the entire spectrum of financial needs. “We are the only foreign private bank with such an extensive footprint on the ground in China. At the same time, we are leveraging the entire HSBC ecosystem to offer holistic banking services to our clients,” Mau adds.

This support extends not just to clients’ personal wealth or business activities, but also to meeting their family needs. This can include helping clients with financial aspects of their children’s overseas education, whether applying for a credit card or opening a bank account in a foreign country.

As many HNW and UHNW Chinese adopt a more international outlook, HSBC’s truly global network—covering 64 markets and with Global Private Banking & Wealth serving 35 of these—is another major draw for mainland clients. “Chinese clients are looking beyond just Asia because of their international lifestyles, and therein lies the importance of the offshore and onshore strategy for us. The fact that we are already the largest international bank in mainland China puts us in a leading position to serve these clients,” says Tan.

Planning for Sustainable Futures

HSBC is tapping on its expertise in legacy and succession planning to support HNW and UHNW Chinese as they prepare for a significant wealth transfer to the next generation in the coming years. With over 75 years of experience working with families around the world, our HSBC Trustee offers global coverage with trust companies conveniently located in Hong Kong, Singapore, Delaware and New York in the US, and Jersey in the Channel Islands to help clients plan for their future and manage a smooth handover of their wealth.

“Clients want to work with a partner that they know is going to be around for many generations; someone they can trust to help them carry on their legacy for future generations,” says Tan. To this end, HSBC also conducts programmes for our next-generation UHNW clients to expand their horizons to become the future leaders.

Many among China’s wealthy are also keen to give back to society as part of their legacy. To support them, HSBC has established a series of events under its “HSBC GPB China Philanthropy Forum” initiative to share knowledge and connect like-minded families.

On its part, HSBC in mainland China has also demonstrated its commitment to give back to the communities it operates in. For instance, by the end of 2021, HSBC had made accumulated donations of nearly RMB1.3 billion (US$181 million) in mainland China, supporting rural revitalisation, financial education, environmental conservation, elderly care, child welfare, community development, innovation and entrepreneurship, as well as pandemic control and disaster relief.

Another fast-expanding sphere of interest among Chinese HNW and UHNW clients is sustainability, and in particular ESG investments. With many of its Chinese clients already investing in ESG through offshore wealth hubs such as Singapore and Hong Kong, HSBC is committed to enhancing its offerings in this space through continued innovation and product development in the coming years.

In 2022, HSBC has hired about 100 employees to support the rapid expansion of its Chinese onshore private banking business. Looking ahead, HSBC will further expand its onshore GPB team size three-fold in the next five years, with a focus on grooming local talent. The bank will also continue to invest in new products and digital platforms to enhance the level of service and solutions it can deliver to Chinese clients onshore.

“Many Chinese clients are now looking for professional partners who will guide them in an increasingly complex environment, and work alongside them to find the right solutions for their needs,” Tan notes. “As such, we will continue to invest in the talent and capabilities of our onshore business in China, with the objective of growing our share in this dynamic market.”