Wealth Management Connect: lenders vying for US$700 million a year in fees in Greater Bay Area, Bank of China executive says

Wealth Management Connect is the banking sector’s ‘next big driving force’ for fee-based income, says BOC Hong Kong executive Arnold Chow

Bank of China’s combined branch network of almost 1,100 – the widest in Greater Bay Area – gives the group an edge in tapping the scheme benefits

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Bank of China expects the Wealth Management Connect to become a huge fee generator for the banking sector in the Greater Bay Area. Photo: SCMP

Published: 8:30am, 19 Jul 2021

The upcoming Wealth Management Connect will generate US$700 million in fee-based income a year for banks in Hong Kong and mainland China, making it the “next driving force” for the industry in the Greater Bay Area, according to Bank of China Hong Kong (BOCHK).

The initiative will bring in a wide range of income, such as trading fees from selling investment products for clients, income from converting yuan into Hong Kong dollars and other currencies and charges for transferring money across the border, said Arnold Chow, deputy general manager for personal digital banking product department.

“According to our clients’ response, we found both mainland and Hong Kong investors have great interest to invest in the Wealth Management Connect scheme,” Chow said during a media briefing last week. “We expect the plan will be popular and it will be the next driving force for fee income for the banking sector.”

BOCHK and its rivals HSBC, Standard Chartered, Bank of East Asia and other lenders are eyeing new income sources from the scheme to bolster income amid pressure from decades of low-interest rate environment.

Beijing unveiled the cross-border wealth management link a year ago, which will allow Hong Kong and Macau residents to buy mainland investment products sold by banks in the Greater Bay Area. Likewise, residents of the nine cities in southern Guangdong province will also be allowed to buy investment products sold by banks in Hong Kong and Macau.

Chief Executive Carrie Lam Cheng Yuet-ngor said last week the scheme will be rolled out soon. Authorities on both sides of the border have set an aggregate quota of 300 billion yuan (US$46.5 billion) in fund movement in both directions. Each individual investor can invest up to one million yuan.

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