Wealth Management Connect: Hong Kong lenders race for tie-up with mainland peers as China abandons rule on partnerships

Standard Chartered, HSBC, Bank of East Asia and DBS are among lenders preparing to form partnerships to tap Greater Bay Area opportunities

Banks can seek multiple partners to sell investment products on both sides of the border, following changes to the policy draft last month

Reading Time:3 minutes

People walk up the steps at a border crossing facility, at the Sha Tou Jiao Port, in Shenzhen. Photo: Bloomberg

Published: 8:30am, 21 Jun 2021Updated: 10:48am, 21 Jun 2021

Lenders in Hong Kong are racing to establish multiparty tie-ups with mainland peers to prepare for the Wealth Management Connect initiative in the Greater Bay Area after China eased a one-to-one partnership to cross sell products.

Standard Chartered Bank is in talks with several Chinese banks to sell Hong Kong or international fund products in the mainland market, according toAnthony Lin, its chief executive for the Greater Bay Area. Rivals including HSBC and DBS Bank are also engaged in similar discussions.

China appears to have relaxed a rule under the connect scheme by allowing Hong Kong lenders to team up with multiple partners in the mainland to sell wealth management products to onshore clients, Lin said, citing a policy draft issued by the banking regulator last month. The initial proposal in June last year restricted each lender to one partner.

Anthony Lin, CEO of Greater Bay Area at Standard Chartered Bank (China). Photo: Handout

“The latest policy change has turned the one-to-one model to one-to-multiple partnerships,” Lin told the Post by phone from Shanghai. “This will provide more choices for investors in terms of investment products and bank choices.”

Growing affluence among in China has turned the onshore market into a battleground for lenders seeking to capture fees and advisory-based incomes. One in every two new dollar-denominated billionaires in 2020 were minted in China, surpassing the number in the US, according to the Hurun Report.

China is home to the most self-made women entrepreneurs in the world, a separate Hurun report showed. It produced 24 new female billionaires in 2020, raising the total to 85. The nation also had 60 billionaires aged under 40 with a combined worth of more than US$223 billion.

Lin said the biggest winners under the latest policy draft would be smaller lenders which do not have an operation in both Hong Kong and the nine cities in the Greater Bay Area. They can now quickly scale up by partnering with bigger banks, he added.