Best Chinese Bank for the Wealth Management Connect 2022
Bank of China (Hong Kong)
Bank of China (Hong Kong) has two main selling points when it comes to its Greater Bay Area operations: its vast network of branches within the region, which complement its online offerings, and its emphasis on customers.
Both of these were on show in the past year, thanks to which BOC HK wins the award for the best Chinese bank for GBA for the second year in a row. It is also Asiamoney’s pick for best Chinese bank for the Wealth Management Connect.
The framework for the development of the GBA was first unveiled in 2017, and its potential became clear as key regulators in mainland China and Hong Kong increased their focus on the region. Given its population of more than 86 million and GDP of about $1.9 trillion last year, banks are hoping to capitalize on the opportunities in areas such as cross-border services, wealth management, dual-currency credit cards, remittances, supply chains and foreign exchange.
BOC HK’s positioning gives it a clear advantage. The firm has more than 1,000 branches in GBA – including about 180 branches in Hong Kong and more than 12,000 employees in the city. Its parent, Bank of China, has over 30,000 staff working in GBA.
The bank is able to leverage its wide network, its in-depth knowledge and experience of the market, and its relationships with customers to offer them the right kinds of services. Add to that BOC HK’s digital banking credentials and its competitive advantage increases further.
In 2021, BOC HK’s loans to GBA corporations rose 9.8% and loans to innovative technology companies (of which there are many in GBA, especially in the technology centre of Shenzhen) increased 8.3%.
When southbound trading over the Bond Connect was opened in September 2021, BOC HK was ready to offer clients in the mainland a convenient way to invest in offshore bonds through the Hong Kong bond market.
On the first trading day, BOC HK completed 55 trades worth the equivalent total of Rmb1.29 billion ($192 million) with 27 onshore institutional investors on electronic platforms. This equalled about one third of the total turnover, with BOC HK continuing to hold its lead after the connect’s debut too.
The fact that BOC HK is the only renminbi clearing house in Hong Kong also shows the bank’s strength. In the past year, it fully automated its cross-border fund-clearing channel for both southbound Bond Connect and the WMC, allowing for the expansion of mutual capital market access for clients.
At the grassroots level, BOC HK ensures its retail customers are taken care of too. GBA account holders, for instance, could reactivate their dormant mainland accounts through Bank of China’s Hong Kong branches, giving them respite at a time of travel restrictions.
Some customers could also update the expiry dates of their mainland travel permits through the bank’s Hong Kong branches, update their registered mainland mobile numbers through Hong Kong, and retrieve mobile banking passwords for their mainland BOC accounts online.
Then there is BOC HK’s strengths in the WMC. Launched in September 2021, the scheme allows eligible residents in the GBA to invest in wealth management products distributed by banks on the other side of the GBA divide through a closed-loop funds flow channel.
The WMC consists of the northbound and southbound schemes – southbound referring to residents in the mainland GBA cities investing in wealth products in Hong Kong or Macau, and northbound referring to residents in Hong Kong and Macau buying wealth management products distributed by mainland banks.
In preparation for the connect’s launch last year, BOC HK, working with its parent bank, mobilized as many as 3,500 staff to take the lead in launching WMC services for clients.
BOC HK’s offerings include: efficient account-opening services through easy attestation services; a WMC zone on its mobile banking app that provides a comprehensive outline of all its services; and a 1+1+1 cross-team service model with access to a virtual relationship manager, a wealth adviser and a cross-border specialist.
By February, the bank had a 60% market share in northbound and southbound accounts, despite a slowdown on the WMC this year due to Covid in both mainland China and Hong Kong. By March, of all the southbound accounts opened through the bank, nearly 90% were new customers at BOC HK.
BOC HK offers about 120 Hong Kong registered funds and eight bonds – all assessed as low to medium risk and non-complex, in line with regulatory requirements.
For customer-centricity, BOC HK uses the full range of channels, from SMS, email and WeChat to chatbots and its own BOC Live platform, to tailor offerings for its clients.