Bank of Beijing Private Banking
The Bank of Beijing’s private bank continues to be the best regional private bank by far. Based in the capital and led by chairman Zhang Dongning, the Bank of Beijing serves 48,000 high net-worth clients who collectively have Rmb220 billion ($33 billion) in assets under management.
Of that number, two thirds are based in Beijing; they include some of the most successful entrepreneurs in the nation, such as the chairmen and chief executives of many of China’s leading technology and internet companies.
Apart from tax and estate-planning services, the bank offers HNW clients access to a network of VIP lounges in airports and high-speed train stations across China.
The bank launched its private banking services in 2011, the first among China’s city commercial banks to do so. In 2013, it launched the family trust financial advisory service. Since then, it has led city commercial banks again by becoming the first to set up real estate management family trusts and charitable trusts.
The bank works closely with one of its shareholders, Dutch financial services group ING, to come up with ideas for private banking clients. The collaboration enables the bank to offer services such as succession planning.
Because of China’s one-child policy, which was only phased out fairly recently, most founders of Chinese businesses only have one descendant, making them particularly vulnerable to family inheritance risks. For example, one of the bank’s innovations is a systematic structuring of assets to help founders of family businesses to prevent the seizure of assets by non-core members, such as a daughter-in-law or son-in-law.
Family trusts, the bank says, help its clients to isolate and protect certain private assets, separating them from others such as a family’s corporate assets, for safekeeping down the generations. Such instruments can protect beneficiaries from the risks and disputes caused by changes such as divorce or remarriage, and help to preserve wealth for later generations. They can even be structured in such a way as to incentivize positive behaviour among the descendants, for instance, rewarding those who study harder or who are more entrepreneurial than others.
The bank has adopted an inheritance model it calls: ‘Equity trust + Supervisor + Family charter’: it advises the family to use the equity of the family business as the core of the trust asset and to set up a supervisory structure that operates under a family charter, or set of rules that guides the management of the trust.