Hana Bank, the banking unit of South Korea's Hana Financial Group, will introduce South Korean-style private banking in China this month.
Hana, which introduced private banking in South Korea in the early 1990s, will launch its private banking service in Jilin Province through the Bank of Jilin, a commercial bank based in Changchun. Hana Bank holds a 16.98% stake in the Chinese bank.
"On Oct. 6, Hana Bank will send its private banking specialists to the Bank of Jilin, tasked with executing the implementation of the South Korean-styled private banking system," said Lee Hyung-il, director of the private banking headquarters at Hana Bank
"At the same time, our specialists will learn and exchange views on China's regulations and market environment, while working on co-developing financial products for Chinese customers."
Hana considers Jilin the right place to run its pilot project because of the growing demand for the service among ethnic Korean-Chinese and because China's northeastern provinces have seen a rapid rise in the number of "high net worth individuals” or HNWIs.
HNWIs are defined as people with investable financial assets, excluding their primary residence, in excess of US$1 million. Jilin has 20,500 HNWI who comprise 0.8% of China’s total number of HNWIs.
In 2011, the number of Chinese citizens who held private wealth of more than RMB6 million (US$1 million), including privately-held businesses, private residences and investable assets, was estimated at 2.7 million.
Northeastern China, which includes Jilin, Liaoning and Heilongjiang, account for about 5% of the total HNWIs. This number, however, is expected to grow over the next 10 years as the average net income of overall Chinese citizens is projected to grow faster than the country's economic growth.
Lee expects the sustained increase in the wealth of Chinese will inevitably lead to a rapid expansion of the number of HNWIs and a corresponding increase in personal wealth.
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