Royal Bank of Scotland (RBS) announced a joint operation with the Bank of China yesterday to provide private banking for people who have made fortunes as the world’s largest communist state transforms itself into a market economy.

Speaking in Beijing, Sir Fred Goodwin, chief executive of RBS, said he was confident that the sheer size of the market in China would justify the venture.

RBS has taken the lead among British banks entering the Chinese market. The UK’s second-biggest bank led a con-sortium that bought a 9.6 per cent stake in Bank of China in the lead-up to its flotation and RBS now owns 4.26 per cent of the country’s No 3 bank.

The new venture will be seeeking clients among the estimated 320,000 Chinese who have disposable assets of more than $1 million (£500,000) to invest. The bank’s first two branches will open on March 28 in Beijing and Shanghai.

Li Lihui, president of Bank of China, said that the venture was a breakthrough for Chinese private banking and was being launched when the number of wealthy Chinese is growing rapidly along with the blistering economy. “The numbers will be very considerable,” he said.

Yue Yi, manager of the new private bank, said: “Success in making a fortune brings to the most affluent people not only nobility and privileges but also the pressure related to the conservation and appreciation of wealth.”

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