While investment banks across the town are laying off staff, Bank of China (Hong Kong) is on a hiring spree for its newly launched private banking business.
The lender, one of the largest retail banks in the city, yesterday announced the launch of private banking services for customers with at least US$2 million to invest.
Jason Yeung Chi-wai, a deputy chief executive of BOCHK, said the bank had already hired a team of 30, half of them experienced private bankers.
"This is a good time to start private banking as demand for such services is increasing on the mainland and elsewhere in the Asia-Pacific region," Yeung said.
He said industry surveys showed the Asia-Pacific region had 20 per cent of the 29 million high-net-worth individuals with wealth between US$1 million and US$50 million. Among them, one million were on the mainland, representing 3.4 per cent of the total.
"Mainland China is expected to surpass Japan to become the second-most wealthy country in five years. This will increase the demand for private bank services," he said.
Yeung said BOCHK was not inclined to acquire existing private banks because of operational difficulties that came with mergers.
"We prefer to build up our staff and customer base from scratch. This is a more difficult route and will take a long time, but we believe this will help us create a better long-term relationship with our customers," he said.
Wendy Tsang Kim-yin, the managing director and head of private banking at BOCHK, believes the bank will be able to compete with Western private banks that have a longer history in the business.
"Many other private banks are run as part of investment banks and they do not have commercial banking operations," Tsang said. "BOCHK has a strong commercial banking network and more than 200 branches in Hong Kong.
"We can provide comprehensive services to our customers, from wealth management to corporate banking and personal banking services."
Yeung said many existing BOCHK customers would meet the criteria for upgrade to private bank customers, but it would be up to them to opt for the new services.
He believes many high-net-worth customers may want to use BOCHK's private bank services for its strong yuan business network.
"We'll focus on developing yuan-denominated products and services. We believe those who want to invest in yuan products will come to us because our close connection to our mainland parent, Bank of China, gives us an advantage in developing yuan products," Yeung said.