HSBC extends Chinese private banking network to lure new digital millionaires

HSBC Global Private Banking has launched its business in the large Chinese cities of Chengdu and Hangzhou, it said on Tuesday, to try to capture a bigger share of the local market as uncertainties cloud potential for China’s wealth growth.

The bank also said it plans to explore opportunities in China’s southwest region. Its existing branches are located in eastern areas where more high net worth (HNW)individuals live.

The number of Chinese millionaires is expected to double by 2026 to 12.2 million from 6.2 million in 2021, a Credit Suisse report said last month, despite Beijing’s national drive to ease wealth inequality and a sharply slowing economy.

HSBC sees robust demand for wealth management in Chengdu, capital of the western province of Sichuan with more than 21 million people. The bank has already launched private bank services in Beijing, Shanghai, Guangzhou and Shenzhen.

“As a new class of HNW and ultra HNW individuals emerges from the vigorous development of Hangzhou’s digital economy, demand for international wealth management has also grown significantly,” Jackie Mau, head of global private banking at HSBC China, said in a statement.

China’s tech giant Alibaba and its financial affiliate Ant Group are both headquartered in Hangzhou, one of two Chinese cities that are home to a large number of HNW individuals enriched by the digital economy in China. Shenzhen, home to Alibaba’s peer Tencent is another highly-competitive market.

Regulatory uncertainties could still undermine prospects.

Beijing launched in late 2020 a crackdown that effectively halted Ant’s initial public offering that could have created more millionaires keen for wealth services.