(Yicai) Aug. 11 -- Foreign lenders in China have accelerated their local retail banking adjustment since the start of this year, closing more than 10 traditional branches and redirecting more resources to wealth management centers, flagship sub-branches, and other high-end outlets.

HSBC's China arm has closed nine ordinary branches this year, with more than half located in southern Guangdong province and others in Shanghai, Hangzhou, and Chengdu, Yicai found from regulatory documents.

While scaling back traditional branches, lenders have sped up establishing flagship sub-branches and private wealth management centers in core cities, focusing retail operations on high-net-worth clients and wealth management. HSBC China and Bank of East Asia China have set up such sub-branches in several first-tier cities this year.

"High-net-worth clients' demand for banking services has shifted to long-term wealth planning and inheritance from short-to-mid-term wealth management, with demand for wealth preservation and intergenerational inheritance planning increasingly becoming a must," Yang Dexing, president of UBS China, said to Yicai. "There is also significant room for improvement in the proportion of global asset allocation among China's high-net-worth population."

Compared with the services offered by banks' traditional branches, those of flagship outlets emphasize privacy, professionalism, and brand display, making them an important tool for foreign banks to deepen their Chinese market presence and strengthen competitiveness, industry insiders told Yicai.

Standard Chartered Bank China has established priority private wealth management centers in Shanghai, Beijing, and Hangzhou since 2023, focusing on providing asset growth, diversified investment, and wealth inheritance services to local wealthy clients.

As demand for wealth management continues to increase and the opening-up of the financial sector deepens, foreign banks in China are facing unprecedented opportunities to expand their local wealth management business.

The average annual growth rate of entrusted assets in China, including trusts, wealth management products, and insurance asset management, was around 8 percent over the past five years, surging 10.4 percent to CNY154 trillion (USD21.44 trillion) last year from 2023 to rank second in the world, according to the China Asset Management Market 2024 to 2025 report jointly released by China Everbright Bank and its wealth management subsidiary.

Foreign institutions will be supported to increase investment in wealth management, asset allocation, insurance planning, and other areas to meet clients' comprehensive wealth preservation and appreciation needs, Li Yunze, director of the National Financial Regulatory Administration, said at this year's Lujiazui Forum.

Editors: Tang Shihua, Martin Kadiev