China Everbright Bank and China Merchants Bank have both grabbed approval from Beijing to launch their own wealth management subsidiaries.
China Everbright Bank announced on 18 April that it had obtained approval from the China Banking and Insurance Regulatory Commission (CBIRC) for the establishment of Everbright Wealth Management Co., Ltd. (光大理财有限责任公司), becoming the first Chinese joint-stock lender to secure the regulatory go-ahead for such a vehicle.
Soon afterwards China Merchants Bank (CMB) followed its lead, announcing that it had obtained approval from CBIRC for the establishment of China Merchants Bank Wealth Management Co., Ltd. (招银理财有限责任公司).
CMB first unveiled plans to launch an asset management subsidiary back in March of last year, while Everbright announced similar ambitions in June 2018.
CMB and Everbright have both indicated that the capital contribution sums for their wealth management subsidiaries will be up to 5 billion yuan, and that they will be exclusive investors in their respective vehicles at the outset, before giving subsequent consideration to the introduction of strategic investors.
According to a report from Securities Daily at least 30 Chinese banks have unveiled plans to establish their own wealth management subsidiaries, with projected capital contribution sums ranging from 2 – 10 billion yuan.
These banks cover a broad range of lenders from major state-owned giants to joint stock banks and municipal commercial banks, with Weihai Municipal Commercial Bank, Bank of Chaoyang and Bank of Gansu most recently joining their ranks.
All of China’s big six state-owned banks are establishing their own wealth management subsidiaries, including ICBC with registered capital of up to 16 billion yuan; Agricultural Bank of China (12 billion yuan), Bank of China (10 billion yuan), China Construction Bank (15 billion yuan), Bank of Communications (8 billion yuan) and Postal Savings Bank (8 billion yuan).