China Merchants Bank: Ushering in the Era of Family Office in China
China Merchants Bank, the sixth-largest lender in China, intends to boost its family office business as a result of an increase in the population of ultra-high net worth individuals. Already ranked China's number-one private bank with AUM exceeding US$300 billion, the Bank is exploring different ways to cater to the demand from newly minted billionaires and their families, and to maintain its competitiveness in retaining these customers amid fierce competition with domestic and foreign banks. Management also needs to brace for an emerging trend in which super-affluent families opt to reduce their reliance on traditional bankers by setting up independent family offices. The case raises issues in segmentation of private banking, change in organization design, and devising strategies for target customers and value creation.