Winners rationale

China’s wealth management industry reached an inflection point in 2017 when authorities set about deleveraging markets, removing opportunities for regulatory arbitrage and doing away with implicit guarantees. As a result, a vast number of banks will need to regear their operating models to ensure business sustainability. But for some, including China Merchants Bank (CMB), the changes will only reinforce their conviction that wealth management is a systematic and client-centric endeavour.

Indeed, the emphasis CMB Private Banking places on client satisfaction and risk-adjusted returns in this largely volumes-infatuated space is sufficient cause to name it China’s best private bank in 2017.

CMB’s “1+N” investment consulting service – where “1” represents an experienced private banker and “N” an investment consultant team – is designed to ensure clients receive the most suitable advice and solutions according to their needs and profiles. This service is supported by a scientifically-informed approach to asset allocation, which harnesses the latest theories relating to VAR risk management and portfolio management.

CMB’s dedication to meeting the exacting needs of its clients extends to its suite of value-added services, including events and tailored salons covering health, parenthood, philanthropy and business matters, and a next-generation forum that addresses issues around succession planning. Clients are also exposed to a consistent output of market views and research produced in-house, thereby raising their financial acumen and, in turn, increasing the quality of their interactions with the bank.

As a private bank originated from and rooted in China, the bank is not without international ambition. Its overseas development emphasises the idea of ‘Chinese heritage, global insights’, and the strategy of the bank’s international expansion is to follow its clients. CMB ensures that its investment advisory approaches, market research, product review and legal and compliance in the overseas market are aligned with that for its onshore market.

By getting the fundamentals right, CMB – China’s largest private bank, with AUM of RMB 1.8 trillion as of September 2017 – continues to reap rewards on the business side. Its growth over the past decade is, itself, worthy of note. In the short span of ten years, the private bank has amassed client assets at a CAGR of 39.8% (2012-2016), with net new money inflows totalling RMB 355 billion in 2017 (+49.15% YoY); pre-tax profits hit RMB 3.48 billion at a cost/income ratio of 29.8%; its client base continues to swell, at latest count reaching 65,694; and its footprint now encomapasses major Mainland cities and global metropolis including Hong Kong, Singapore, New York and Sydney.

China Merchants Bank is Asian Private Banker’s Best Private Bank – China Domestic for 2017.