StanChart bets on Japan's neglected affluent

By Jonathan Soble

TOKYO (Reuters) - Banker Mark Devadason thinks Japan's affluent savers get a raw deal from their banks.

Devadason, chief executive of Standard Chartered Plc's (STAN.L: Quote, Profile, Research, Stock Buzz) (2888.HK: Quote, Profile, Research, Stock Buzz) operation in the country, has seen competitors rush into private banking for the super-rich, while the merely wealthy are left to wait in line at drab, understaffed commercial branches.

"Our observation is that the rest of the market has been left to being retail," Devadason said at the Reuters Wealth Management Summit in Tokyo. "We think that's a sweet-spot opportunity that we want to target."

At the bank's poshly decorated branch in central Tokyo, such moderately wealthy clients get a taste of what the bank calls the "five-star hotel concierge service" enjoyed by multimillionaire patrons of Swiss private banks.

Standard Chartered, which is headquartered in London but does much of its business in Asia, opened its first Japanese retail branch in July 2005, offering personalized "priority banking" to clients who hand over more than 20 million yen ($170,000).

The strategy is paying off, Devadason said. The bank expects to beat the 15-20 percent annual revenue growth in Japan's overall retail banking and asset management market, and plans to raise its sales force to 220 from 80 in the next six months.

"Foreign banks still only have around 1 percent market share, so there's great opportunity," he said.

More than a quarter of Japanese households have savings of 20 million yen or more, accounting for 60 percent of all household financial assets, according to Standard Chartered's own research.  Continued...