StanChart China eyes cards, wealth mgmt

By Tony Munroe and George Chen

SHANGHAI (Reuters) - Asia-focused bank Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) (2888.HK: Quote, Profile, Research, Stock Buzz) said on Thursday it hopes to roll out credit cards in China by next year and is ramping up its private banking operations in order to tap into surging personal wealth in the country.

The London-based lender, an emerging markets specialist that won approval for local incorporation earlier this year in China's long-restricted banking market, still needs permission from regulators to launch credit cards.

"If we can get the regulatory approval ... hopefully next year (we will start issuing cards)," said Christine Ip, head of consumer banking at Standard Chartered Bank (China) Ltd, during the Reuters China Century Summit.

She said Standard Chartered hopes to be able to offer a dual-currency card to its higher-end customers and small and mid-sized corporate customers.

The bank does not plan, however, to issue cards aggressively to quickly build up a customer base.

"We don't want to give away cards. We see credit cards as part of a holistic customer proposition," Ip said.

She also said starting up a credit card operation was a costly undertaking that did not generate instant returns.

"For the first two or three years, investing in credit cards will not be a profitable business," she said.

Less than 1 percent of China's population has credit cards, and more than half of those accounts are inactive, according to McKinsey & Co.

Credit card profits in China could hit $1.6 billion by 2013, McKinsey said. About 50 percent of the market is now in the hands of the country's four biggest state banks.

SERVING THE RICH

Standard Chartered's private banking business, which covets the burgeoning population of Chinese with net investable assets of at least $1 million, already has an office in Beijing and will open one in Shanghai next week, Ip said.

Within a year, Standard Chartered aims to open two more private banking offices and is looking at cities in eastern China, including Hangzhou and Ningbo, as well as in the west, with Chongqing and Chengdu two possibilities.

"It will take time to build the momentum," Ip told the summit.

Trustee services, estate planning and tax planning are currently off-limits to private banks, while China's closed capital account limits opportunities to invest abroad.  Continued...