The Research On Development Of Private Banking In Chinese Commercial Banks In The Year Of Post-Financial Crises

Private banking refers to a kind of bank business which is wealth management orientated. A package of financial services would be provided to those wealthy people professionally in this business. Usually, private banking is defined as the highest level service supplier among all kinds of bank business and has become the core business strategy in many famous international banks. It’s based on the investment business, excellent professionals, data analysis and distinctive management. The Banker, a British magazine, once mentioned "private banking and investment banking are two of the most dazzling pearls in the financial field. Both of them are the highest targets attracting banks all over the world". According to statistics in2004, private banking industry manages about4.5trillion assets globally. All these asset distributed in different financial centers, such as Geneva, Zurich, London, New York, Miami, Singapore and Hong Kong.The internationalization of western private banking developed the business in Asian. The Shanghai representative office of Swiss International Bank, a subsidiary of American International Group (AIG) is engaging in private banking business, opened officially on September27,2005, which marks the beginning of the international private banking come into China. In March,2007, Bank of China announced to develop private banking with the cooperation from its strategic partner Royal Bank of Scotland. It means Chinese commercial bank joined the competition about financial service for high-net-wealth persons.After the financial crisis in2008, global financial situation changed. The private wealth showed signs of slowdown and the private banking business suffered recession around the world. At the same time, Chinese high net worth people rose rapidly, benefiting from the development of Chinese economy in the past20years. As the high-speed growth of wealth and the rapid expansion of the people, this group attracted global eyes in private banking field. From the beginning of2007, a lot of domestic commercial banks began to develop private banking business to strive for the high-net-worth personal market. The domestic private banking business faced lots of problems when it was born, such as divided financial market operation, controlled interest rate, limited investment channels, lacking of financial tools and the lack of effective law. Additionally, after the last financial crisis, global economy recovered slowly, the pressure of reformation build-up in domestic financial system, supervision policy became more strict, customers became more rational. All of these brought a severe test to the domestic private banking business.This paper based on the management, marketing, finance and other theories, guided by the experience from private banking practice, and attempted to use comparative analysis, empirical analysis and normative analysis to research the problems about private banking development in Chinese commercial banks. Firstly, this thesis starts from the definition of private banking business, then summarizes the characters of private banking, reviews the history of private banking, analyzes the character and experience of western private banking development. Secondly, it analyzes the current internal and external environment which domestic private banking facing with, exploring the motive force and strength in Chinese commercial bank when promote private banking business. Finally, it introduces the status about private banking development in Chinese commercial bank, finding the factors restricting the growth of private banking, and proposing solutions for Chinese commercial banks to break the bottleneck.