Asiamoney China Gold Awards 2020
Overall Best Gold Bank: Industrial and Commercial Bank of China
|Li Baoquan, ICBC|
In the decade since it set up its specialized precious metal business in Shanghai, Industrial and Commercial Bank of China (ICBC) has become a leader in sales, trading, leasing and other services relating to physical and financial precious metals – particularly gold – for both retail and institutional clients. ICBC was the first bank to win a licence for its precious metals division. Over the last decade, it has grown into a full-service gold bank, offering clients over 500 products across 36 categories. More than 120 million clients have invested in ICBC’s regular gold investment product, which has brought in Rmb4.6 billion ($644 million) of income for the bank.
The bank achieved eye-catching growth in 2019. Under the leadership of Li Baoquan, general manager of the precious metal department, ICBC remained the top transaction-clearing service provider and gold leaser for the Shanghai Gold Exchange. It generated revenues that made up nearly 60% of the total market share of the big four Chinese state-owned banks.
Between 2009 and 2019, it achieved a compound annual growth rate of 75% in precious-metal trading volumes, 27% in transaction value and 49% in its number of clients.
ICBC has the biggest team in the industry, housing 100 staff at its headquarters alone. It also has an impressive network, with nearly 430 offices across 48 countries and regions. That, coupled with its close relationships with 1,500 banks outside China, means the bank is able to serve its domestic and overseas clients in all time zones, offering 24-hour, non-stop trading services.
The bank is a member of the main global exchanges, including the London Bullion Market Association, the New York Mercantile Exchange, the Tokyo Commodity Exchange and the Dubai Gold and Commodities Exchange.
It has also helped to develop the infrastructure of the domestic market, having been contracted by the Shanghai Gold Exchange to build a physical gold warehouse in the Greater Bay Area last July.
The bank was at the forefront of innovation in 2019. It partnered with the likes of Tencent and the Palace Museum in Beijing, bringing out a number of new physical gold products to the retail market. ICBC also started offering customised services to both individual and corporate clients and was the first to partner with online financial information and services provider Hithink RoyalFlush Information Network.
Best Bank in Domestic Retail Gold Market: Agricultural Bank of China
Agricultural Bank of China (ABC), managed by president Zhang Qingsong, has a natural advantage over its Chinese peers when it comes to the retail market: it has at least 20,000 branches in mainland China, serving more than 600 million clients nationwide and providing its retail precious metal clients easy access to the products on offer.
The number of such clients had grown by nearly 20% by the end of 2019, to reach 23 million.
ABC offers a broad range of products to its customers, spanning physicals, gold investment as well as trading. The bank’s overall precious-metal trading volume beat that of its largest state-owned bank peers in 2019.
On top of its already comprehensive lines of at least 1,000 physical products, ABC launched several of what it considered to be key products for 2019. These include new gold bars with high investment value, as well as innovative products co-designed with renowned brands such as Disney and the Palace Museum. These key products contributed to the best sales volume ABC had seen in three years, up 22% from 2018.
But ABC did not rely purely on its retail network. It also actively expanded its presence through online platforms. Throughout 2019, ABC launched a number of campaigns and promotions to drive traffic to its e-banking platform, which resulted in a 50% increase in sales volume over the course of last year.
The bank’s online strategy proved invaluable in complementing its already deep physical network: a quarter of the transactions were completed outside branch business hours.
Best Chinese Bank in Overseas Gold Markets: Bank of China
Bank of China (BoC) entered the international gold market in the 1970s, when it was a specialized foreign exchange and trade bank – becoming the first Chinese commercial bank to do so.
The bank joined the London Bullion Market Association (LBMA) in 1987. An active participant in the gold trading business in London ever since, it joined the LBMA Gold Price auction process, becoming the first in Asia – and only the eighth globally – in 2015.
BoC offers 24-hour precious metals leasing, spot, forward and swap trading services from its branches in Beijing, London and New York, covering gold bars, gold coins, silver bars and platinum.
A Chicago Mercantile Exchange (CME) Clearing settlement bank and collateral custodian, BoC executed the first trades of the new Shanghai Gold futures contracts – in dollars and offshore renminbi – on CME Group in October 2019.
It also became a market maker for the Shanghai Gold Exchange’s newly launched New York Gold extension products and executed the first trades last year.
The bank, run by president Wang Jiang, helps domestic precious-metal manufacturers and suppliers sell their products overseas, while providing related trade and financing services.
Its clients are some of China’s largest players in the field.
Best Bank in Gold Brokerage Trading: Shanghai Pudong Development Bank
|Pan Weidong, SPDB|
Shanghai Pudong Development Bank (SPDB), run by president Pan Weidong, is recognized by both its state-owned and joint stock commercial peers as a leading Chinese joint stock bank in gold trading. Over the last five years, its turnover from retail customers trading gold on the Shanghai Gold Exchange jumped 28 times, from Rmb41.6 billion ($5.8 billion) in 2014 to a record Rmb1.21 trillion in 2019. Year-on-year growth was nearly 127%.
SPDB’s secret, at least in part, lies in its efforts to educate investors, which turned out to be crucial in 2019.
Last year, gold prices continued to rise, resulting in a market that was crowded by new retail clients. While that has given a boost to SPDB’s business, it also brought new challenges in investor education.
SPDB developed a digital training app, so that more than 3,600 wealth managers can help retail clients develop a better understanding of the precious metals market.
In addition to education programmes, the bank also uses its online trading platform in combination with third-party platforms to redirect clients to SPDB. In 2019, it gained 340,000 new clients.
Best Bank for Innovation in Gold Products and Services: China Minsheng Bank
|Li Bin, China Minsheng Bank|
China Minsheng Bank is regarded as one of the most innovative and technology-savvy Chinese banks – and its precious metals
business is no exception. The bank consolidated its precious-metals business lines in 2016, nearly a decade after it started operating in the field.
It launched a brand known as Minsheng Gold Bank, offering products and services across trading, financing, physicals and wealth management.
Li Bin, executive vice-president at Minsheng, oversees the business.
In 2019, Minsheng invested in the Gold Bank, upgrading its online platform and making it a key component of its precious metal business.
It combined cutting-edge technologies and tools such as e-payment methods, big-data analysis, cloud computing and mobile applications, to create a financial platform that offers its clients gold products and services in a much more efficient and comprehensive way than traditional over-the-counter services.
Minsheng was one of the first Chinese banks to receive a regulatory green light to partner with Chinese e-commerce and financial platforms such as JD.com, Xiaomi, China Telecom and China Unicom.
The partnerships offer Minsheng offer a much broader retail client base for its gold investment products
Its partnership with JD.com – launched in June 2019, and the first between one of China’s gold banks and a non-bank financial platform – led to the biggest increase new accounts that Minsheng had seen in five years.
Thanks to JD, the transaction volume for the following six months exceeded what the bank would normally see in a year.