Asiamoney China Gold Awards 2019
The inaugural Asiamoney China Gold Awards seek to recognise Chinese banks that have excelled in serving corporate and retail clients in the gold market. In making our decisions, banks were asked to prove their credentials through a range of products and services, customer base and the introduction of innovative offerings.
Overall Best Gold Bank: Industrial and Commercial Bank of China
Industrial and Commercial Bank of China is regarded as a pioneer among Chinese banks when it comes to developing products and services to help its customers trade and invest in gold and other precious metals, and last year it continued to strengthen its position as the market leader in serving precious-metal clients.
|Li Baoquan, ICBC|
ICBC was the first domestic bank to trade gold on clients’ behalf in 2002, after the Chinese government started deregulating control of the domestic gold market. In 2009, it was the first domestic bank to create a separate business unit to integrate the distribution, trading platforms and management teams for its precious metal products and services. It was also the first Chinese bank to be able to serve a full range of clients (miners, traders or retailers) in the domestic precious-metal sector. These days, what sets it apart from domestic rivals is the range of 500 products in 36 categories that it offers to its precious-metal clients. The department’s general manager is Li Baoquan.
All these achievements have helped China’s biggest bank by assets to maintain steady, rapid growth in its precious-metal banking businesses. Last year’s figures are no exception: the number of precious-metal customers surged 60% from a year earlier, while trading volume and turnover of precious metals at the unit showed compound annual growth rates of 80% and 30% respectively.
Last year, the revenue generated by ICBC’s precious-metals unit alone accounted for as much as 40% of the total market share of China’s four largest state-owned commercial banks (which includes the Agricultural Bank of China, Bank of China and China Construction Bank).
ICBC has long been the largest transaction-clearing service provider for the Shanghai Gold Exchange, clearing Rmb345.5 billion ($50 billion) for the exchange in 2018. It was also the largest gold leaser and the largest brokerage at the exchange in 2018.
Among Chinese banks, ICBC is the most active participant in overseas gold markets: it is a member of the London Bullion Market Association, the New York Mercantile Exchange, the Tokyo Commodity Exchange and the Dubai Gold & Commodities Exchange.
Best Bank in the Domestic Retail Gold Market: Shanghai Pudong Development Bank
Shanghai Pudong Development Bank has established itself as a leader in the domestic retail gold market by virtue of its effective marketing strategy, outstanding education programmes and investment advisory services, even though it is a much smaller bank than the state-owned Chinese commercial banks by assets.
|Pan Weidong, SPDB|
Unlike its state-owned peers, SPDB, whose vice-president is Pan Weidong, does not have a sprawling network of bricks-and-mortar
outlets across China. Instead, the bank is successfully attracting customers to the retail gold market through instant messaging services such as QQ and WeChat, and by opening online gold shops with e-commerce firms such as JD.com and Alibaba’s Tmall. From market research, SPDB discovered that many retail investors shunned the gold market because of a lack of understanding of its workings, so the bank has led both online and offline educational programmes to teach potential customers about the opportunities and risks involved in gold investment and trading.
When it comes to serving retail gold clients, SPDB also excels in providing comprehensive investment advisory services and technical support for gold trading. The bank publishes its analyses of the gold market and recommends investment strategies for retail clients, in both cases via its public WeChat account – something it has done for more than seven years.
It has invested heavily in developing trading software to enable customers to invest in the gold market through digital channels, and it continuously upgrades its gold-trading platforms.
All these efforts have paid off. SPDB has maintained its position as the leading Chinese bank trading gold for retail clients in recent years.
In the last three years, its turnover for retail customers trading gold on the Shanghai Gold Exchange has surged: in 2018, turnover jumped 79%, year on year, to exceed Rmb533 billion ($77 billion).
Best Bank for Innovation in Products and Services: China Minsheng Bank
China Minsheng Bank has won acclaim for its innovative products and services, even though it was not the first lender to serve precious-metal clients in the domestic banking sector.
Minsheng started offering services for precious-metal clients in 2007. Nearly a decade later, in 2016, it upgraded its capabilities and was one of the first two Chinese banks to introduce a concept known as ‘the gold bank’. This is a separate account created to pool customers’ gold assets such as physical gold savings and gold-linked investments, and to track customers’ gold-related liabilities, such as borrowing against gold deposits.
The creation of such accounts gives the bank a better understanding of its precious-metal customers and helps it to develop tailor-made services to help with investment, trading, financing and asset management, for example.
Minsheng was also ahead of other Chinese banks in providing full convertibility between cash deposits, physical gold savings and other gold-linked investment products for customers. It has embraced fintech such as big-data analysis and cloud computing in its marketing and risk management, and has partnerships with internet firms for product distribution.
All these steps have enabled Minsheng to establish one of the most powerful integrated platforms in China’s banking sector to serve its precious-metal clients, both online and offline.
As a result, the bank has also developed a broad range of products for precious-metal customers.
Minsheng’s leadership in product innovation is also reflected in its proprietary gold trading. The bank leads domestic firms in developing computerized trading for precious metals and in rolling out Renminbi-denominated gold options; this has boosted the annual turnover of its proprietary precious-metal trading business to more than Rmb1 trillion ($145 billion) for the first time in 2018.