China’s banking regulator has given its approval for a third joint-stock commercial bank to prepare to establish its own wealth management subsidiary.
Industrial Bank Co. announced on 13 June that it had obtained approval from the China Banking and Insurance Regulatory Commission (CBIRC) to prepare to establish Industrial Bank Co. Wealth Management Co., Ltd. (建兴银理财有限责任公司).
At present CBIRC has given its approval to nine lenders to prepare to establish wealth management subsidiaries, including the big six state-owned banks, as well as joint-stock commercial lenders China Everbright Bank and China Merchants Bank.
Following the completion of preparatory work Chinese banks are required to apply to CBIRC to commence wealth management operations via their subsidiary.
The wealth management subsidiaries of China Construction Bank and ICBC have already officially commenced operation, while Bank of Communications recently announced that it had completed industrial and commercial registration procedures.
As of the end of 2018 Industrial Bank had over 3 trillion yuan in assets under management on behalf of clients, while its wealth management product balance was 1.82 trillion yuan, putting it second amongst joint-stock commercial lenders.
By the end of last year Industrial Bank’s net-value wealth management product balance was over 600 billion yuan, for YoY growth of 287.88%, while their share of non-principal guaranteed wealth management products increased by 36 percentage points compared to the start of the year to reach 49.60%.
In the first quarter of 2019 net-value wealth management products continued to enjoy rapid growth, rising by 233.70% YoY to account for 53.08% of non-principal guaranteed wealth management products.