Authorities have rolled out the long-awaited Wealth Management Connect Scheme, enabling freer flow of investment products within the 11-city Greater Bay Area. So, what say the banks? finews.asia takes a look.

Following the launch of the new wealth link, numerous financial institutions are preparing to tap into the two-way channel with a fund flow limit of 150 billion yuan each ($23 billion).

In total, more than 20 lenders in Hong Kong are expected to apply for the scheme – including a handful of global banks – with some market watchers projecting fee-based income to reach as high as $700 million per annum. 

So, what say the banks? finews.asia takes a look.

HSBC

HSBC is the largest international bank in the GBA with over 5,000 retail staff in the region.

The Asia-focused British lender has plans to provide over 100 selected wealth management products across asset classes and some risk levels with expectations for the HKMA to make its first product approval in October and its own launch to occur in the same month. It is also exploring potential partnerships with financial institutions for the wealth scheme. 

«The range of eligible products and distribution channels stipulated in the rules reflect a pragmatic approach, taking into consideration the market environment and investors’ needs,» said HSBC co-chief executive David Liao. «Products allowed under both ‘northbound’ and ‘southbound’ scheme will be of low-to-medium risk to ensure a smooth start.»

Citi

Citi plans to offer over 100 types of low to medium risk investment products including bonds, mutual funds and multiple foreign currency services. 

It is also working with an unnamed mainland China partner bank for the final preparatory stages of the wealth link launch.

«Citi welcomes the latest development of the Wealth Management Connect (WMC) Scheme and we are going in full force on the scheme as planned,» said Lawrence Lam, consumer business manager and chief executive for Citi Hong Kong. «To support the client-led wealth growth in Hong Kong, we plan to hire over 1,000 professionals across the wealth franchise by 2025.» 

Standard Chartered

At Standard Chartered, there are plans to house over 1,600 staff by 2023 in its Guangzhou-based GBA center, which costs $40 million in investments and has completed its first phase of development.  

«The launch of the Cross-boundary Wealth Management Connect Pilot Scheme marks a significant milestone in the opening up of China’s financial markets and integration of economies in the region,» said Standard Chartered’s Asia CEO Benjamin Hung.

«Not only will the scheme provide huge opportunities to financial institutions in both mainland China and Hong Kong, it will also offer individual investors a wider selection of investment choices.» 

DBS

One of the first foreign banks to locally incorporate in China, DBS forecasts that GBA will make up a quarter of its Hong Kong-based 'Treasures Wealth’ business over the next three years.

The affluent unit targets customers with HK$1 million ($128,600) or above in deposits.

«The Wealth Management Connect marks another important milestone for China’s capital account liberalization and a significant effort in fostering a closer financial cooperation in Greater Bay Area,» said Sebastian Paredes, CEO of DBS Hong Kong. «We will work together with our esteemed local partners in China to leverage this significant opportunity for our customers, and to continue to contribute to the development and prosperity of GBA.»

Local Banks

In addition to global players, local banks also expressed optimism on the new distribution channel with Bank of China (Hong Kong) and Hang Seng announcing plans to offer over 100 and 140 products for the scheme, respectively. 

Family-owned Bank of East Asia (BEA) will look to hire 300 sales staff across the GBA in the coming three years to support its 1.8 million customers and nearly 90 branches in the 11 cities.  

«Harnessing the GBA’s favorable policies, the bank has stepped up its development in the region by pioneering the offering of GBA mortgage and facilitating cross-boundary remittance services,» said BEA co-CEOs Adrian Li and Brian Li.

«With the launch of the WMC, the bank will further provide northbound customers access to high-yield RMB assets on the mainland, and give southbound customers access to offshore investments, enabling them to diversify their portfolios.»