Foreign lenders fight it out in private banking turf

The explosive growth in China's affluent population, riding on the nation's boom, has led the nascent private banking sector to become a red-hot battlefield for foreign banks.

EFG Bank, a private banking arm operating in Asia under Zurich-based EFG International, is the latest overseas lender to move into the nation, establishing a Shanghai representative office last month to test the waters in the Chinese market.

Clement Lin, EFG Bank's chief representative in Shanghai, said that as its new office is unable to undertake wealth management business at the moment, the lender will "take this opportunity in China to do market research, to identify the particular needs of its rich people and to promote our branding".

EFG's move was made just a few weeks after Citigroup, which enhanced its range of products for high net-worth individuals in China.

According to a report from Capgemini and Merrill Lynch Wealth Management, China has 477,000 individuals with investable assets of at least $1 million.

If property investments are included in the net worth, the number could be in the range of 2 to 3 million people, said Anand Selva, head of consumer banking at Citi China.