Big state-owned lender Bank of China has just garnered approval from Chinese regulators for its wealth management vehicle to commence operations.
On 27 June Bank of China announced that it had obtained approval from the China Banking and Insurance Regulatory Commission (CBIRC) for its fully invested subsidiary BOC Wealth Management Co., Ltd. (中银理财有限责任公司) to commence operation.
BOC Wealth Management is headquartered in Beijing and has registered capital of 10 billion yuan, with its business scope encompassing the issuance of publicly offered and privately offered wealth management products; wealth management advice and consulting and other asset management-related operations.
Chinese banks have made a beeline to launch their own wealth management subsidiaries since the launch of new asset management regulations in April of 2017, that removed the implicit guarantees undergirding wealth management products.
Chinese regulators provide approval to banks for wealth management subsidiaries in two stages – the first being approval for preparations to establishment wealth management vehicles, and the second being approval to commence operations.
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.
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.