China Merchants Bank (CMB) launched "art banking," an alternative investment program, Tuesday to offer China's new-rich a chance to enjoy Chinese contemporary art, and at the same time, make long-term investment.
Targeting at clients with minimum assets of 10 million yuan, the program is part of CMB's private banking section launched in 2007 in collaboration with China Contemporary Art Foundation, which has a huge collection of more than 3,000 Chinese contemporary art works.
"We have worked with a group of Chinese and Western art experts to pick out 70 artworks including photos, oil paintings, wash paintings and sculptures, ranging from 10,000 to 1 million yuan," said Su Yan, executive director of China Contemporary Art Foundation.
Private banking clients who pay a deposit money for the excellent art work will be given 12-month period to bring the artwork home and decide whether they want to keep it or not. After 12 months, they can either purchase it or return it and get their money back.
"The model is brand new in China, as art investment often involves great risk and wealthy people need time to understand Chinese contemporary art," said Cai Can huang, deputy general manager of CMB's private banking section.
Sea of Desire by Su Xinping
In June 2007, Minsheng Bank first initiated art investment product in China licensed by the China Banking Regulatory Commission, with expected annual yield of 3 to 20 percent.
"Some banks hire art investment consultant and bring clients' money to auction house. We are not doing that, because it easily slips out of control," said Cai, affirming the program as a safe and long-term investment and a means of spiritual enjoyment for high-end clients.
"We offer free transportation and as long as the artwork is well preserved, our clients will at least break-even," said Cai.Source: The Global Times