Bank of Hangzhou has just become the first municipal commercial bank in China to garner approval from regulators for its own wealth management subsidiary.
On 1 July Bank of Hangzhou announced that it had recently received approval from the China Banking and Insurance Regulatory Commission (CBIRC) to make preparations for the establishment of its own limited liability wealth management company.
Under China’s current approvals system for bank wealth management subsidiaries Bank of Hangzhou will need to apply to the Zhejiang province branch of CBIRC to launch operations following the completion of preparatory establishment work for Bank of Hangzhou Wealth Management Co., Ltd. (杭州银行获准筹建杭银理财有限责任公司).
The announcement from Bank of Hangzhou arrives just after the wealth management subsidiaries of several of China’s big state-owned banks commenced official operation in cities around the country, including China Construction Bank in Shenzhen on 3 June, ICBC in Beijing on 6 June and Bank of Communications in Shanghai on 13 June.
On 27 June Bank of China also obtained approval from regulators for its wealth management subsidiary to commence official operations.
On 31 August 2018 Bank of Hangzhou first issued its “Announcement Concerning the Establishment of an Asset Management Company” (关于设立资产管理公司的公告), outlining the establishment of a fully invested subsidiary with registered capital of no less than 1 billion yuan.
Bank of Hangzhou said that the establishment of an asset management company was in consonance with regulatory requirements, would help to improve the distinction between on-balance sheet and off-balance sheet risk, and raise its operating capability with regard to asset management.
