The wealth management subsidiaries of China’s commercial banks have demonstrated robust profitability in the first half of 2021, as the transitional period for new asset management rules affecting wealth management products (WMP’s) winds to a close.
All of the 19 bank wealth management subsidiaries in China that have released performance reports for the first half have posted profitable outcomes, with cumulative net profits of 10.118 billion yuan.
Industrial Bank’s wealth management subsidiary posted the largest volume of net profits at 1.983 billion yuan, as compared to 103 million yuan for the same period last year. China Merchant Bank’s wealth management subsidiary took second place with 1.557 billion yuan in net profits, for a YoY rise of 3.80%.
Ping An Wealth Management saw net profits of 820 million yuan, while Bank of Communications Wealth Management posted profits of 606 million yuan, Agricultural Bank of China Wealth Management 585 million yuan, China Construction Bank Wealth Management 529 million yuan, and Bank of China Wealth Management 485 billion yuan.
Postal Savings Bank of China’s wealth management vehicle posted 447 million yuan in net profits in the first half, and ICBC’s 333 million yuan.
2021 is the final year in the transitional period for new asset management regulations released in 2018, that have sought to address risk concerns by removing the implicit guarantees on wealth management products (WMP’s), as well as driving a shift from guaranteed principal and expected yield WMP’s to net value WMP’s.
A spokesperson from the China Banking and Insurance Regulatory Commission (CBIRC) said that efforts by bank wealth management subsidiaries to rectify WMP operations is currently “on schedule.”
“As of the end of July nearly 70% of outstanding wealth management rectification tasks have been completed, and it is expected that by the end of the year the vast majority of banks can complete rectifications.”