Affluent Hong Kong residents and tourists are seeking more investment and wealth management services, buying more insurance and increasing spending on debit cards amid this year’s market rally, according to a senior Citigroup executive.
“We saw strong growth in sales of investment services and insurance products in the first quarter,” Vicky Kong Pik-Teung, the bank’s head of wealth management for North Asia and Australia, said at a press conference on Monday.
“The growth momentum continued in the second quarter with clients becoming more willing to seek investment advice for products other than term deposits. The recent rise in the stock market has led clients to become more active in investing overall.”
Data released by the Insurance Bureau last Friday showed Hong Kong’s first-quarter life insurance sales to mainland Chinese tourists reached HK$15.63 billion (US$2 billion), up 63 percent from HK$9.61 billion in the same period last year.
Hong Kong’s stock market has broken out of a four-year streak of declines, stabilizing in the first quarter and beginning to rise in April. The benchmark Hang Seng Index is up 7% this year, recovering from a roughly 14% drop last year, as China introduced measures to support the mainland’s property market and facilitate cross-border trade between Hong Kong and the mainland.
Kong said Citigroup’s premier accounts – Citigold accounts, which require minimum investable assets of HK$1.5 million, and Citigold Private Client accounts, which require minimum assets of US$1 million – saw combined annual growth of 24 percent in the first quarter.
“The Hong Kong government is promoting family offices, the talent import scheme, and the capital investment entry scheme. [CIES]”A lot of wealthy people from mainland China and around the world are coming to Hong Kong,” Kong said.
“Citi stands ready to offer these clients a full range of insurance, fixed income, equity-linked notes and other asset management services.”
The government has received more than 200 applications from wealthy individuals wanting to move to Hong Kong through CIES, Financial Secretary Christopher Hui Chin-yu said last week.
Kong said that in addition to demand for more investment services, more customers are asking for debit cards. Transactions using the bank’s debit cards are set to triple in 2023 compared to pre-COVID levels in 2018, outpacing credit cards, which grew by about 40% in the same period, she said. But credit cards remain the predominant choice, accounting for 95% of all card transactions last year.
“Many shops and restaurants abroad now accept digital payments, which has led many travellers to carry less cash and instead use debit and credit cards,” she said.
Citi on Monday launched a new elite debit card with a daily spending limit of HK$300,000, compared with HK$100,000 per day for its regular debit card.
