The "Annual Report on the Financial Management Market of China's Banking Industry (2020)" shows that-
Bank wealth management generates nearly trillion yuan in income for investors
Our reporter Guo Ziyuan
A few days ago, the "Annual Report on China's Banking Wealth Management Market (2020)" (hereinafter referred to as "Annual Report") issued by the Banking Wealth Management Registration and Custody Center (hereinafter referred to as the "Annual Report") shows that as of the end of December 2020, the scale of my country's bank wealth management market reached 25.86 trillion yuan. A year-on-year increase of 6.90%; a cumulative income of 993.25 billion yuan was created for investors that year, an increase of 7.13% year-on-year.
At the same time, bank wealth management products have realized the docking of wealth management funds with the financing needs of the real economy by investing in bonds, non-standardized debt, unlisted equity and other assets.
As of the end of December 2020, the scale of funds to support the real economy has reached 22.21 trillion yuan.
Driven by many policies such as new asset management regulations and financial management regulations, my country’s banking wealth management products are moving in an orderly manner towards net worth, professionalism, and transparency, and they are showing many new features.
First, among closed products, the issuance of long-term products has increased, and the mismatch of maturity has been eased.
Second, from the perspective of investment structure, although bonds are still the main allocation assets, the investment ratio of equity assets is expected to increase.
The third is the acceleration of "net value transformation", the scale of open products has continued to rise, and the pressure on old products has fallen sharply.
Enhancement of long-term product fund-raising capacity
The "Annual Report" shows that in 2020, a total of 380 financial institutions issued wealth management products, with a total of 69,000 products issued, and a total of 124.56 trillion yuan of funds raised throughout the year, a year-on-year increase of 10.59%.
As of the end of December 2020, a total of 350 financial institutions across the country have surviving wealth management products, with 39,000 co-existing products, and a surviving balance of 25.86 trillion yuan, a year-on-year increase of 6.90%.
It is worth noting that the maturity of closed-end bank wealth management products is constantly being extended, and the fund-raising capacity of long-term products is also constantly improving.
Specifically, the weighted average maturity of newly issued closed-end wealth management products in 2020 is 228 days, an increase of about 30 days compared to the same period last year; in contrast, the scale of short-term products has dropped significantly, of which, less than 3 months (inclusive) The remaining balance of closed-end products was only 152.9 billion yuan, a year-on-year decrease of 63.67%, accounting for only 0.59% of all wealth management products.
"The extension of the term is mainly to alleviate the maturity mismatch." The relevant person in charge of the China Banking Association said that financial institutions must meet the requirements of maturity matching to dock non-standardized claims. Due to the long term of non-standard assets, they need to extend the closure period Or set the opening date to match it.
"Non-standard assets are the core source of high-yield assets. Although the extension of the period will increase the difficulty of selling wealth management products, financial institutions can use amortized cost method to smooth net value fluctuations." The person in charge said that from a practical point of view, long-term The fund-raising capacity of maturity products is constantly improving.
As of the end of December 2020, the accumulated funds raised by closed-end products for more than one year were 1.44 trillion yuan, an increase of 37.86% year-on-year, accounting for 13.12% of all newly-issued closed-end wealth management products, accounting for a year-on-year increase of 5.7%.
From the perspective of fundraising methods, publicly offered wealth management products are still the absolute main force of bank wealth management.
In 2020, the total raised funds of publicly offered wealth management products were 122.84 trillion yuan, accounting for 98.62% of the funds raised by wealth management products; as of the end of December 2020, the remaining balance of publicly offered wealth management products was 24.75 trillion yuan, accounting for 95.71% of the remaining balance of wealth management products.
Provide long-term stable funds for the stock market
As we all know, the risk appetite of mainstream bank wealth management customers is prudent.
Therefore, the investment structure of bank wealth management products is still dominated by fixed income.
The "Annual Report" shows that as of the end of December 2020, the remaining balance of fixed income products was 21.81 trillion yuan, an increase of 15.65% year-on-year, accounting for 84.34% of the remaining balance of all wealth management products.
In addition, the proportions of mixed products and equity products were only 15.36% and 0.3% respectively.
Affected by the recent increase in risk in the bond market, the risk appetite for bond investment in bank wealth management products has also declined significantly.
As of the end of December 2020, the scale of bank wealth management products holding high-rated bonds rated AA+ or above reached 11.48 trillion yuan, accounting for 83.36% of the total credit bond holdings, a year-on-year increase of 2.15 percentage points.
However, with the establishment of wealth management companies, the investment ratio of equity assets is expected to increase next.
As of the end of December 2020, 24 wealth management companies have been approved for establishment, of which 20 have officially opened, and the balance of wealth management companies' products has reached 6.7 trillion yuan.
"The successive establishment of bank wealth management companies and foreign-controlled wealth management companies marks the further evolution of the banking wealth management market in a professional direction." said Ma Zhongfu, secretary of the party committee and chairman of the banking wealth management registration and custody center.
The reporter was informed that the regulatory authorities are continuing to increase the proportion of wealth management funds entering the equity market, and many wealth management companies have cooperated with public funds and other institutions.
Among them, some wealth management companies with strong investment capabilities have begun to issue equity products and private equity products that directly trade stocks.
"We have always adhered to the concept of'building a large asset management ecosystem and jointly serving the domestic financial market', and have cooperated with various institutions at home and abroad in many aspects." said Li Lijie, vice president of CCB Wealth Management.
Up to now, CCB Wealth Management has established strategic partnerships with hundreds of domestic asset management companies, large securities companies, trust companies, and more than 50 international asset management institutions and commercial banks.
Many industry insiders said that in the long run, wealth management products will gradually increase the investment ratio of equity assets, provide long-term stable funds for the stock market, and support the development of the capital market.
Stick to the bottom line of risk prevention
In addition to the emergence of new features in terms of term and operation mode, the "net-worthy transformation" of bank wealth management products is still the focus.
In fact, within a period of time after the issuance of the new asset management regulations, due to the impact of the "throttle period" of transformation, the scale of bank wealth management products once declined. However, as the subsequent new industry regulations are gradually implemented, and various institutions actively promote their business Regulating the transformation, the results of related reforms have initially appeared.
The "Annual Report" shows that the scale and proportion of net worth products continue to grow rapidly.
As of the end of December 2020, the remaining scale of net-worth wealth management products was 17.4 trillion yuan, a year-on-year increase of 59.07%; net-worth products accounted for 67.28% of the remaining wealth management products, an increase of 22.06 percentage points year-on-year. Among them, open net-worth products Products account for up to 81% of all net value products.
While banks are vigorously issuing net-value products and promoting transformation, they are also actively reducing old products and accelerating the disposal of stock assets. The proportion of new compliant products continues to increase.
Before the release of the new asset management regulations, capital-guaranteed wealth management products accounted for about 30% of all wealth management products. However, as the new regulations clarified the non-capital-guaranteed properties of asset management products, various institutions began to gradually reduce capital-guaranteed wealth management products, which is similar to that before the release of the new regulations. In comparison, the pressure drop has exceeded 90%.
In addition, the scale of inter-bank financial management and nested investment has continued to shrink.
As of the end of December 2020, the remaining balance of interbank wealth management has fallen to 0.39 trillion yuan, a year-on-year decrease of 53.86%. Interbank wealth management accounts for less than 2% of all wealth management products; the scale of nested investment in wealth management products through various asset management products is 89,300 Yuan, a year-on-year decrease of 4.7%, and a decrease of 25.71% compared to before the release of the new asset management regulations.
Many people in the industry said that the end of 2021 will be the end of the transition period for the "new asset management regulations", and the "examination questions" faced by financial institutions are not easy.
On the one hand, it is necessary to strictly adhere to the bottom line of risk prevention, especially to help investors shape investment expectations rationally and rationally view fluctuations in net worth; on the other hand, wealth management companies should continue to establish and improve internal control and management systems to improve their operational management and risk prevention capabilities.