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Foreign banks operating in China have been accelerating their adjustments to local retail banking since the beginning of the year. They are closing over ten traditional branches and shifting more resources toward flagship branches, wealth management centers, and other upscale outlets.
This year, HSBC’s China division has shut down nine regular branches, predominantly in southern Guangdong Province, with additional closures in Shanghai, Hangzhou, and Chengdu, according to regulatory filings.
As they reduce conventional branches, these banks are rapidly establishing flagship sub-branches and private wealth management centers in key cities, focusing on high-net-worth clients and wealth management services. Firms like HSBC China and the Bank of East Asia China have launched such outlets in several major first-tier cities this year.
“The needs of high-net-worth clients have shifted from short- to mid-term wealth management toward long-term wealth planning and inheritance,” said Yang Dexing, president of UBS China. “There’s an increasing demand for wealth preservation and intergenerational inheritance strategies. Additionally, there’s significant potential to improve the share of global asset allocation within China’s wealthy population.”
Unlike traditional branch services, flagship outlets emphasize privacy, professionalism, and strong brand visibility, making them vital tools for foreign banks aiming to deepen their foothold in the Chinese market and boost their competitiveness, industry experts noted.
Standard Chartered Bank China has since 2023 opened key private wealth management centers in Shanghai, Beijing, and Hangzhou, offering services related to asset growth, diversified investments, and wealth inheritance tailored for affluent local clients.
With rising demand for wealth management and ongoing financial sector opening-up, foreign banks in China face unprecedented opportunities to expand their wealth management operations.
Over the past five years, the annual growth rate of entrusted assets—including trusts, wealth management products, and insurance asset management—has averaged around 8%. Last year alone, these assets grew by 10.4%, reaching CNY154 trillion (approximately USD21.44 trillion), making China the second-largest market worldwide, according to the China Asset Management Market 2024-2025 report jointly issued by China Everbright Bank and its wealth management subsidiary.
Regulators have emphasized supporting foreign institutions to increase investments in wealth management, asset allocation, insurance planning, and other sectors to better serve clients’ comprehensive needs for wealth preservation and growth, stated Li Yunze, director of the National Financial Regulatory Administration, during this year’s Lujiazui Forum.
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