Bank of China opened a private banking service in Beijing and Shanghai yesterday, the first local bank to target the growing ranks of the super rich in China.

The service is only for customers with over US$1 million to invest and is a joint project with its partner the Royal Bank of Scotland (RBS), which owns about 4.4 percent of the Chinese bank.

"The thing that excites us is just the size of the marketplace," said Fred Goodwin, chief executive of the RBS.

China was home to 320,000 millionaires in 2005, according to a report by Capgemini and Merrill Lynch.

The total assets held by this group topped US$1.59 trillion at the time, ranking China No 2 in the Asia-Pacific region after Japan.

That number is bound to increase rapidly given the country's continuing economic boom, said Li Lihui, president of Bank of China.

The private banking business would operate under Bank of China's name to start with, but Goodwin said the branding may change over time.

Initially, the business will offer 12 products including foreign exchange, subscriptions to initial public offerings and private equity, said Yue Yi, general manager of personal banking at Bank of China.

Bank of China's private client customer base, combined with the experience of RBS in international private banking, gives it an unrivalled position for the business, Goodwin said.

Foreign banks such as BNP Paribas, Citibank and Deutsche Bank have already begun private-banking operations in China.

(China Daily March 29, 2007)