Author: Wang Li
Producer: Global Finance
Before the Lunar New Year, the annual report card of bank wealth management was released, and as of the end of 2023, the scale of the bank wealth management market was 2680 trillion yuan, with a total of 3 new wealth management products issued throughout the year110,000, raising 5708 trillion yuan, the number of investors in wealth management products increased to 11.4 billion, creating 698.1 billion yuan of income for investors.
Since the implementation of the new regulations on asset management in 2018, as a supporting implementation rule, wealth management subsidiaries have been gradually implemented in batches, and 31 wealth management companies have been established and operated at present, and at the end of 2023, Zhejiang Bank Wealth Management was approved for preparation, which is expected to be the 32nd wealth management company established since December 2018 not far from the official opening.
With the continuous expansion of wealth management companies and the continuous enhancement of market influence, it has become an important part of the domestic wealth management market, and shares the wealth management market with public offerings and insurance brokerage asset management.
Investors who buy bank wealth management products in banks all the year round will find that bank wealth management products are very different from four or five years ago. secondly, the issuer of wealth management products is no longer the bank, but the wealth management subsidiary; Finally, you can choose to buy products from multiple wealth management companies in one bank, not just the wealth management subsidiaries of your bank.
In fact, this is a step forward in China's wealth management market.
Before 2019, many bank wealth management products were principal-guaranteed products, and net-worth products could be said to belong to the pilot content, and due to the shadow banking problem, there were many channel products in bank wealth management products, which increased financial risks.
In April 2018, the People's Bank of China and other four departments jointly issued the Guiding Opinions on Regulating the Asset Management Business of Financial Institutions (also known as the "New Regulations on Asset Management"), which clarified that asset management business must not promise to guarantee capital and returns, breaking rigid payment. In September of that year, the former China Banking and Insurance Regulatory Commission (CBIRC) formulated the Measures for the Supervision and Administration of Wealth Management Business of Commercial Banks, which required commercial banks to carry out wealth management business through subsidiaries with independent legal person status. If the conditions are not met for the time being, the head office of a commercial bank shall set up a department specializing in wealth management business to carry out centralized and unified operation and management of wealth management business.
This kicked off the prelude to the successive establishment of wealth management companies.
In December 2018, the former China Banking and Insurance Regulatory Commission officially approved the application of China Construction Bank and Bank of China to establish a wealth management subsidiary. In 2019, a total of 11 wealth management subsidiaries of banks opened. At present, a total of 31 wealth management companies have opened.
Zheshang Bank announced that on December 29, 2023, the bank received the approval of the State Administration of Financial Supervision and Administration to prepare for the establishment of Zheyin Wealth Management Co., Ltd. (hereinafter referred to as Zheyin Wealth Management). If approved, it will become the 32nd wealth management company in China.
In 2021, only BlackRock CCB Wealth Management and Guangyin Wealth Management were approved for opening, and in 2023, only BlackRock CCB Wealth Management and Guangyin Wealth Management were approved for opening, and in 2023, only Faba Agricultural Bank Wealth Management was approved for opening, and Zhejiang Bank Wealth Management was approved for construction.
Among the 31 wealth management companies that have opened, including 6 major state-owned banks, 11 joint-stock banks, 8 urban commercial banks, 1 wealth management subsidiary of a rural commercial bank and 5 Sino-foreign joint venture wealth management companies.
According to incomplete statistics, more than 10 local banks plan to set up wealth management subsidiaries. However, it is obvious that the subsequent approval speed is difficult to have a peak stage of concentration, and the financial regulatory authorities issue wealth management company licenses in accordance with the principle of "mature one, approve one". After all, once a financial risk occurs, it will not only affect the parties subsequently, but even affect the entire industry, so the regulatory approval of the establishment of wealth management subsidiaries of local banks will be cautious.
After the landing of wealth management companies, the scale has developed rapidly, and as of the end of 2023, there are only 1940,000, with a survival scale of 2247 trillion yuan, an increase of 1 from the beginning of the year01%, accounting for 83 percent of the total market85%。
Driven by the two major regulatory policies of the "New Regulations on Asset Management" and "New Regulations on Wealth Management" in 2018, the rigid payment of wealth management products has been broken, the products have shifted to net-worth management, and the operation of capital pools has been prohibited, and as of the end of 2023, the scale of net-worth wealth management products is 2597 trillion yuan, accounting for 9693%, an increase of 146 percentage points.
Judging from the above data, the bank wealth management market has survived the impact of the "redemption wave" in 2022.
In 2022, due to the impact of capital market fluctuations, the bank wealth management market experienced a large-scale drawdown of net worth and redemption pressure from investors, and the scale of wealth management products decreased slightly. By the end of 2022, a total of 278 banking institutions and 29 wealth management companies across the country had existing wealth management products, and the number of existing products was 3470,000, down 441%；The scale of existence is 2765 trillion yuan, down 466%。
Affected by the redemption wave at the end of 2022, the scale of the bank wealth management market will be surpassed by the public offering for the first time in the first half of 2023, with a difference of about 235 trillion yuan. In the second half of the year, as the growth rate of the scale of public offering slowed down, the difference between the two narrowed to 08 trillion yuan, the overall scale of wealth management is still weaker than the public offering**. The subsequent changes in the competitive landscape may be affected by factors such as the trend of deposit and loan interest rate policies, the risk appetite of the liability side, and the behavior of institutions.
In order to cope with the excessive fluctuation of net worth, the market positioning of prudent investment in wealth management products has been strengthened. Fixed income products remained dominant, with a scale of 25 at the end of the year82 trillion yuan, accounting for 9634%, an increase of 1 from the beginning of the year84 percentage points, continuing the upward trend. In addition, the share of hybrid, equity, commodity and financial derivatives is smaller, and the scale of existence is 086 trillion yuan, 008 trillion yuan and 004 trillion yuan, of which the scale of mixed products decreased by 39% year-on-year.
The increase in the scale of fixed income products is also related to investor preferences. In 2023, the number of investors will continue to increase, and risk appetite will continue to decline. In 2023, the number of bank wealth management investors will increase to 11.4 billion, continuing the upward trend, an increase of 1784%。Investors' risk appetite continues the downward trend, intuitively speaking, from the perspective of the risk characteristics of existing products, the scale of low-risk wealth management products is about 896 trillion yuan, accounting for 3343%, an increase of 5 from the beginning of the year08 percentage points. From the perspective of investor risk characteristics, first-level risk appetite (conservative) investors account for about 174%, an increase of about 2 percentage points from the beginning of the year.
However, with the recent improvement of the capital market, bank wealth management products are cautiously increasing the issuance of hybrid products, and the pace of issuance of hybrid products has accelerated since the beginning of this year.
By the end of the Spring Festival holiday in February, 19 mixed wealth management products had been established, of which 15 were from bank wealth management companies. In January 2024, a total of 63 hybrid bank wealth management products were established, accounting for 154%, up 03%。
Weighted products have higher expected returns, but also have more risks and uncertainties. It is undoubtedly more concerned by investors to try to control risks while grasping opportunities in the equity market, and according to the disclosed product manuals, the investment strategies of many products emphasize the control of risks.
For example, a number of "Sunshine Orange Anying" series of hybrid products issued by Everbright Wealth Management emphasize that this product mainly invests in fixed income assets and equity assets with quasi-fixed income attributes, and most of the products are hybrid wealth management products with R2 (medium and low risk) risk level.
Looking forward to 2024, it is expected that the total scale of wealth management will continue to recover.
Southwest ** believes that opportunities and risks in the wealth management industry will coexist in 2024, and on the whole, the favorable factors are stronger than the unfavorable factors, and the favorable factors are: (1) In the context of the narrowing of the net interest margin, the deposit interest rate may still have room to be reduced, and residents' investment and wealth management funds may be passively improved; (2) The wealth management industry has gradually adapted to net worth, and the net value management and investment research capabilities of products have been improved.
The disadvantages are: (1) under the background of "lack of debt" of commercial banks, they may compete with wealth management products for the available funds of residents; (2) The duration of the liability side of wealth management products has been shortened, and the pressure on the investment side has increased; (3) Investor education is still relatively lacking, and low risk appetite leads to low tolerance for drawdown of wealth management products, and the stability of the liability side needs to be improved. It is expected that the wealth management industry is expected to maintain the recovery trend in 2023 in 2024, and the year-on-year growth rate will reach 14 under optimistic estimates97%, and the scale is expected to reach 3029 trillion yuan.
On the asset side, according to the banking wealth management registration and custody center, at the end of 2023, the proportion of standard bonds + interbank certificates of deposit + non-standard in the wealth management asset allocation structure will be about 628%, followed by cash and bank deposits with better liquidity and lower risk, interbank lending and public offerings**, accounting for respectively. 7% and 21%, while the proportion of highly elastic equity assets is only 29%。
Under the "asset shortage", the structure of wealth management assets in 2024 will still be mainly concentrated in creditor's rights assets with stable income, especially credit bonds, which will play a more prominent role as ballast. Southwest ** expects that in 2024, wealth management will hold bank two permanent bonds through credit sinking, so as to achieve the goal of thickening income.
However, in 2023, the net scale of wealth management in the secondary market for the second permanent bond is still small. Looking back on 2023, the increase in credit bonds in the secondary market is still dominated by urban investment bonds and industrial bonds, while the increase in holdings of secondary permanent bonds began in the fifth month after the "redemption wave". This is mainly because the second permanent bond, as an "interest rate amplifier", has a greater volatility than other credit varieties, and the holding of the second permanent bond will increase the net value management pressure on the liability side.
Therefore, considering the demand for net worth management on the side of wealth management liabilities, Southwest ** believes that the potential investment demand for wealth management for the second permanent bond still mainly comes from the low-volatility and stable income demand, and if there is potential marginal supply pressure in 2024, the marginal carrying capacity of wealth management funds for the second permanent bond may decline accordingly.
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