Municipal lender Shanghai Pudong Development Bank (SPDB) has just obtained approval for the establishment of its own wealth management subsidiary.
SPDB announced on 12 August that the China Banking and Insurance Regulatory Commission had (CBIRC) had given its approval to the establishment of “SPDB Wealth Management Co., Ltd.” (浦银理财有限责任公司) in Shanghai.
As early as 2015 SPDB had mooted plans to establish its own wealth management subsidiary.
The lender announced on 30 August 2018 that it planned to establish a wholly owned wealth management vehicle in Shanghai with registered capital of 10 billion yuan.
As of the end of July 2020 SBDC’s wealth management product (WMP) balance was approximately 1.5 trillion yuan, including nearly 900 billion yuan in net value WMP’s.
Chinese banks have accelerated the launch of wealth management subsidiaries since the launch of new asset management regulations at the start of 2018, which removed the implicit guarantees on the WMP’s used by smaller banks to better access retail funds.
A total of 14 bank wealth management subsidiaries have commenced operation, including those belonging to ICBC, China Construction Bank, Agricultural Bank of China, China CITIC Bank, China Merchants Bank, Bank of China, Bank of Communications, Postal Savings Bank of China, China Everbright Bank, Industrial Bank Co., Bank of Hangzhou, Bank of Ningbo, Huishang Bank and Chongqing Rural Commercial Bank.
A report from Everbright Securities sees this number rising to nearly 30 by the end of 2020, with another seven banks already making preparations for the launch of their own wealth management subsidiaries.