Chinese millionaires' total assets topped US$1.59 trillion in 2005, the second biggest in Asia Pacific after Japan, the report said.

Afzal Tarar, managing director of BearingPoint in charge of financial services practice in China, said private banking services sometimes are a "painful" business for lenders as the high-net-worth clients can be picky and hard to please.

Finding the right clients is the key issue, Tarar said.

In the current fight for the super rich, BOC may have a competitive edge as its overseas rivals are restricted in offering yuan-backed services to individual Chinese.

Overseas banks can only offer retail foreign currency services to Chinese and yuan services to expatriates. However, once incorporated in China, they can offer a full array of yuan services to Chinese.

Four major overseas banks - Citigroup, HSBC, Standard Chartered and Bank of East Asia - have already become China registered subsidiaries and are awaiting approval for specific yuan services.

Eight other overseas banks are awaiting approval for local incorporation, and several others said they plan to apply for the status.

Tarar suggested "a global presence" for domestic banks that plan to follow BOC and other overseas rivals to test the private banking sector.

"The super rich always have various assets in different countries," Tarar said. "They want their assets planning in China but also in other countries."

BOC has teamed up with Royal Bank of Scotland to offer the private banking services in Shanghai and Beijing.

Other cities may also be included in the list on market response, Wang Zhaowen, spokesman of BOC, said.

The two parties decided to enter the sector in February last year and then teamed up for staff training and location scouting.

RBS, Britain's second-biggest bank by market value, ran the preparation work for BOC's private banking services by offering its expertise on risk management, human resources and product research.

"Our aim is to offer the services in China that RBS's global clients can enjoy in the global area under the premise of regulatory approval," BOC said.

So, what's the verdict on private banking in China?

"Time will tell," Tarar said.

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