Dutch Bank ABN AMRO will speed up its network expansion in China in preparation for the opening of retail renminbi business to foreign banks by the end of this year.
"We want to be close to our customers," said Kadichah Hei, vice- president of ABN AMRO Bank's (China) consumer client sector. "It's important for a bank to be close to its customers, especially in a country as large as China."
The bank plans to open two new branches in China's central regions and a further sub-branch in
Shanghai soon.
Hei said the bank would open more outlets this year, but she declined to give further details.
By the end of June, ABN AMRO had three branches and five sub-branches in Shanghai,
Beijing and Shenzhen.
The bank has another three offices in Guangzhou,
Wuhan and Tianjin. "But we don't have a plan to upgrade these representative offices to branches in the short term," Hei added.
As foreign banks will be able to provide a retail renminbi service to local residents by the end of this year, they are quickening their network expansion.
HSBC, Europe's largest bank, has expanded its network presence in China to 23 outlets, including 12 branches and 11 sub-branches. And the number of branches will increase to 14 by the end of this year, with the number of sub-branches also growing.
The number of Standard Chartered branches and sub-branches jumped from eight to 14 in 2005, and that number is likely to exceed 20 by the end of this year.
ABN AMRO is unlikely to catch its foreign rivals in terms of outlets in the short term. But the bank has its own strategy luring high-end customers through its wealth management business.
"We are very focused on our wealth management services," Hei said.
ABN AMRO's major wealth management service is the Van Gogh Preferred Banking business. The threshold is US$100,000, and the minimum buy for a single product is US$25,000.
"Currently, our clients are mostly local people," Hei said, adding Chinese are comparatively more conservative in wealth management services. "Therefore, our structured deposit products in China guarantee the return of principal upon maturity."
ABN AMRO has the advantage of offering a greater variety of products than its foreign peers. In the first six months of the year, the bank launched 15 kinds of wealth management products in foreign exchange, with the investment target covering gold, petroleum, renewable energy as well as luxury brands.
The major challenge for Kadichah Hei now is how to deal with customer demand in different regions.
The Chinese market is so huge that customers in different regions have different tastes for products and services, so we have to make adjustments accordingly, Hei said.
She cited the example of preferences in
Beijing and Shanghai: investors in
Beijing prefer a later time for meetings or seminars; and the business style of clients in the two cities is also different.
ABN AMRO, one of the world's largest banks, was founded in 1824. Based in Amsterdam, it opened its first China branch in
Shanghai in 1903.
