Research On Private Banking Development Of Commercial Banks In China

With the fast growth of economy in China, Chinese private wealth is increasing with the same trend. It results in flush demand for wealth management from the millionaire group. Private banking shows great development potential, because it is a kind of total professional finance service provided to the rich by commercial banks. According to 80 / 20 theory, these top wealthy clients with good quality contribute 80 percent of profit to commercial banks. Just for this reason, they are the vital factor to commercial banks development. After entering into Chinese financial market, foreign banks will strive for the top clients chiefly. Therefore competition between domestic and foreign banks will focus on private banking.This paper summarizes the condition of private banking, including the concept of private banking, types of clients, main provided finance service, and so on. On the basis of introducing development of private banking in the western countries, mainly including the UBS, the Pictet&Cie, and the Citigroup Private Bank of America, the paper analyzes those foreign banks' advantage that is worthy of being used for reference by domestic banks. After learning current development situation of private banking in China, problems are found out, such as shortage of financial production variety, lack of excellent professional employee, and limitation of commercial banks system. In the end, the strategic Countermeasures to promote commercial banks in China are brought forward, including to enhance innovation of financial production, to reform commercial banks system, and to employ first-class private banking experts.