"The banks are catering to customer demands for guidance on how to manage money responsibly so they can obtain higher yields," said Zhang Youwen, an economist at Shanghai Academy of Social Sciences.

The outstanding value of individual deposits in local banks stood at 300 billion yuan (US$36.14 billion) in February, or 47.6 billion yuan more than the figure at the end of last year.

Industry officials said China's four largest state-owned commercial banks - the Industrial and Commercial Bank of China, Bank of China, China Construction Bank and the Agricultural Bank of China - began offering Shanghai residents personal financial services in June. The number of such consultants now exceeds 300.

Many of the planning services include free advice about loans, investment portfolio design and fees for bank services.

"The service is drawing enthusiasm from the public," said Fan Xiangyu, Bank of China's Shanghai branch.

"To date, thousands of local residents have used our personal financial advising services," said Sun Weidong, spokesman for ICBC's local branch.

According to a recent survey by the Social Survey Institute of China, 74 percent of the respondents from Beijing, Shanghai, Tianjin and Guangzhou said they were interested in financial services offered by domestic banks, and 41 percent indicated they were in need of professional investment advice.

Eying that huge demand, the ICBC's Shanghai branch has vowed to increase the number of personal financial consultants from its current 160 to 260 by year end.

Another factor fueling the new services is the local banks' desire to acquire as many loyal clients as possible before the nation's entrance to the World Trade Organization.

"Foreign banks cannot provide personal financial services in China now, and we want to capture more clients before that ban is lifted," Fan said.

Meanwhile, foreign banks are taking a close look at domestic banks.

"They (domestic banks) are preparing for fiercer competition by adopting the service," said Crystal Qian, head of external affairs at Standard Chartered Bank's Chinese operation.

"Compared with domestic banks, foreign banks are more experienced in customer services," said economist Zhang. "It is urgent for domestic banks to showcase their services in a bid to fill that gap."

Improving asset quality is a third factor behind the move to personal financial services, according to Zhu Delin, a researcher at the People's Bank of China's Shanghai branch.

"The central bank has called for the 'big-four' to reduce the proportion of bad loans by 2 percent to 3 percent annually," Zhu said.

"The emphasis on individual business is a way out of the bad-loan mire," added the researcher.

(Eastday.com 04/10/2001)