(Yicai) Nov. 10 -- Chinese lenders have reported that their private banking businesses achieved double-digit growth in the number of clients over the first nine months of this year.

China Merchants Bank's private banking clients, or individual customers with assets averaging CNY10 million (USD1.4 million) or more a month, exceeded 190,000 as of Sept. 30, up 13 percent from the end of last year, the lender said in its third-quarter earnings report.

China Minsheng Bank’s private banking client base surged 18 percent to 73,000 in the first three quarters from a year earlier, while since the start of the year Industrial Bank saw an 11 percent increase and Bank of Beijing’s an 18 percent gain to 20,000, according to their financial reports.

The swelling ranks of private banking clients is being driven by the growing number of high-net-worth individuals and increasingly sophisticated wealth management needs, industry insiders pointed out.

The number of high-net-worth individuals in the Chinese mainland -- those with net assets exceeding USD10 million, reached 470,000 last year -- accounting for 20 percent of the global total and ranking only behind the United States, according to the latest Wealth Report published by real estate consultancy Knight Frank.

Seven lenders had more than 100,000 private banking clients as of the end of September, as Ping An Bank joined their ranks, the earnings reports showed.

Entrepreneurs and senior executives in technology, manufacturing, pharmaceuticals, and other emerging sectors are becoming an important source of new private banking clients, as stock incentives are realized and wealth is repatriated to China, a commercial bank source said.

“Their need for comprehensive wealth management, tax planning, and cross-border asset allocation is increasing significantly,” the person pointed out.

Despite rapid industry growth, average assets under management per client are under pressure, and private banks have not yet fully leveraged their ability to offer high-value investment and wealth management services, said Nie Junfeng, chairman of Heritage Family Office.

“Brokerages and fund managers are siphoning off clients from private banks,” Nie noted. “In addition, some Chinese banks have still not set programs to maintain long-term client relationships, and client portfolios remain conservative, with most assets in low-risk products such as large fixed deposits and structured deposits.”

Editor: Martin Kadiev