StanChart Mulls Wealth Management Unit in China Expansion
StanChart Mulls Wealth Management Unit in China Expansion
(Bloomberg) -- Standard Chartered Plc is considering a standalone wealth management unit in China to sell mutual funds to retail investors, in a move that would make it the first foreign bank to fully own a wealth manager in the country.
The London-headquartered bank worked with a consulting firm last year on a feasibility study, according to people with knowledge of the matter. The plan is under management review and subject to changes, said the people, who asked not to be identified discussing non-public matters.
Representatives from Standard Chartered declined to comment.
China’s vast wealth management market plays host to a growing number of firms owned by local banks, which were forced by Beijing to formally separate from their wealth units in 2019 to break implicit bank guarantees on investment products. More than two dozen Chinese banks have won approvals to build independent wealth management subsidiaries.
Global banks and asset managers hoping to join the market have mostly paired with domestic lenders to tap into their vast distribution channels. Amundi SA teamed up with Bank of China Ltd. in 2020, while last May Goldman Sachs Asset Management announced plans for a majority controlled entity with China’s largest bank, Industrial & Commercial Bank of China Ltd.
Standard Chartered, which incorporated a lender in China in 2007 after more than a century operating in the country, is looking to offer a suite of mutual fund products through the new wealth venture, the people said. This would include Qualified Domestic Institutional Investor funds, a program that allows domestic institutions and fund managers to invest a certain quota offshore.
In October, the bank was among lenders to participate in a cross-border wealth program to sell investment products in the Greater Bay Area, a region of 70 million people encompassing cities such as Guangzhou and Shenzhen.
Morgan Stanley has estimated China’s financial household financial assets would reach $65 trillion in 2030, more than doubling from 2020 and giving a bonanza to wealth firms.
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