Growth in the value of the wealth management products sold by Chinese banks has posted a precipitous decline following the central government’s launch of a heavy-handed deleveraging campaign and financial sector crackdown in 2017.
The outstanding balance of WMP in China was 29.54 trillion yuan as of the end of 2017, according to the latest “China Banking Sector Wealth Management Product Market Report (2017)” (中国银行业理财市场报告（2017）) issued by the Banking Sector Wealth Management Product Registration and Entrustment Centre (银行业理财登记托管中心).
The figure marks an increase of 490 billion yuan compared to the start of 2017, for year-on-year growth of 1.69%, as well as a staggering growth deceleration of 21.94 percentage points.
In 2016 banking sector WMP increase by 5.55 trillion yuan to reach 29 trillion yuan, for year-on-year growth of 23.63%.
In sharp contrast 2017 hosted a total of eight consecutive months posting year-on-year declines in WMP growth rates, with interbank WMP seeing especially heavy declines.
As of the end of 2017 the outstanding interbank WMP balance was 3.25 trillion yuan, for a fall of 3.40 trillion yuan, or 51.13%, compared to the start of the year.
Interbank WMP’s accounted for 11% of all WMP’s at the end of 2017, for an 11.88 percentage point contraction in its share of the total.
According to the report standardised assets such as bonds, bank deposits, call loans to banks and interbank CD’s were the primary investment targets for the funds raised via WMP’s.
As of the end of 2017, they accounted for 67.56% of the WMP investment balance, with bond assets accounting for 42.19%.