Italian bank Intesa Sanpaolo is in hiring mode as it moves to set up a wealth management firm in China, having chosen Qingdao as the pilot city for the new business, which it has named Yi Tsai (Italian Talent).
The Turin-based firm is in the process of recruiting key managers and will soon start bringing in other executives, both head office staff and financial advisers, a spokesperson told AsianInvestor via email.
Intesa Sanpaolo did not comment on how much it was targeting in terms of assets under management and in what time frame.
Chief executive Carlo Messina has identified China as a high-growth market and the only country in Asia into which it has chosen to expand its wealth management business.
China already has more than one million high-net-worth individuals with a total of €4.4 trillion ($4.9 trillion) in financial wealth, said the bank, which expects a yearly growth of 20% over the next five years both in terms of client numbers and assets.
The spokeswoman said the firm was comfortable expanding into China as it has gained a "fair share of knowledge" of the mainland market through its presence there since 2008 via the acquisition of a 15% interest in Bank of Qingdao and 49% in Shenzhen-based Penghua Fund Management.
Yet Intesa Sanpaolo faces fierce competition on several fronts: the big domestic groups, including Bank of China and ICBC; the smaller but fast-growing wealth managers, such as Jupai and Noah; and peer-to-peer platforms moving into the wealth space, such as CreditEase and Credit China. That's not to mention numerous other foreign firms targeting the fast-growing pool of mainland money.
Yi Tsai will start operations in Qingdao in Shandong Province towards the end of next year and gradually expand its distribution network to 15 sales offices covering key cities such as Beijing, Shanghai and Shenzhen, a spokeswoman said.
It will provide financial consultancy, distribute only third-party products, both onshore and offshore, initially provided by its partners Penghua and Eurizon. It will also offer non-financial services, such as business consulting, advice on art buying, tax and legal advice.
Qingdao was chosen as the pilot market because of its equity interest in Bank of Qingdao, plus the city was designated as a pilot zone for wealth management by the Chinese State Council in February 2014.
"Within the pilot zone, we expect to obtain favourable conditions to set up a new company and to take advantage of new regulations and more favourable opening of the market towards foreign companies," the spokesperson said.
Yi Tsai willl be wholly owned by the Italian group: 55% by Intesa Sanpaolo, through the international subsidiary division; 25% by Fideuram (the private banking arm); and 20% by Eurizon Capital (the asset management arm).
Intesa Sanpaolo holds assets under management of around €300 billion ($335 billion).