Strength and Pedigree
Wing Lung Bank prospers from China Merchants Bank’s mainland presence and its trusted legacy in Hong Kong
Along and stable history, client relationships that span several generations and close collaboration with its mainland parent company give Wing Lung Bank (WLB) the edge that today’s high net worth individuals are looking for when they need help to manage their wealth.
The Hong Kong-based bank has been particularly successful in capturing offshore clients in China since it became a member of China Merchants Bank (CMB) in 2008 and 90 per cent of its high net worth clients are now from the mainland. At the same time, it continues to service its wealthy clients in Hong Kong, many of whom also have businesses in China.
This dual focus on Hong Kong and China contributed to the 30 per cent growth in its assets under management last year.
“Most international private banks have very little presence in mainland China, while we have CMB, our parent company with its more than 1,000 branches and a reputation as one of the best private banks in China. This makes Wing Lung Bank stand out in the competition,” says Joseph Tam, Wing Lung Bank’s executive vice president and head of private banking and wealth management. “Other international private banks have more international presence. We have an unbeatable presence in mainland China.”
One of the key growth products on both sides of the border, according to Tam, is family trusts. In Hong Kong, they have grown in popularity during the past 10 years, especially after the government removed the estate tax in 2006, making it more favourable for local high net worth individuals to hold assets onshore. And in China, most of the wealth is still held by first generation businessmen and entrepreneurs in their 40s and 50s.
“Wealth creation is no longer their main concern,” Tam says. “Twenty years ago they were only interested in investment opportunities, but when you ask them today they want to know how to preserve their assets and how to transfer their legacy to their next generations.”
Tam estimates that some 70 per cent of new family trusts in Asia today are set up by mainland entrepreneurs. And once they have taken that step, they often start thinking about estate planning as well. These types of products have recently become available in China, but most Chinese businessmen still prefer to set up trusts offshore where the legal system is more mature.
Thanks to active client referrals from CMB, WLB has effectively become the offshore wealth management centre for its Chinese parent and the respect that the bank has earned during its more than 80-year history in Hong Kong means that WLB’S wealth management arm is in a prime position to tap into this trend.
Cross-border asset allocation in general is also becoming increasingly popular among high net worth individuals in China. According to the latest private