With the announcement of the bank’s 2020 annual report, the operating conditions of seven financial management subsidiaries of ICBC, CCB, Bank of communications, China Merchants Bank, Ping’an bank, Everbright Bank and China CITIC Bank also surfaced last year. On March 28, Beijing Business Daily reported that the net profit performance of the seven financial management subsidiaries was divided. At the same time, the “progress bar” of the transformation of bank financial net worth has been updated once again, the transition period of the new asset management regulations is approaching, and the progress of the rectification of financial products has also attracted the attention of the industry.
Differentiation of financial management subsidiary’s ability to absorb money
From the perspective of “gold absorption” ability, the net profit gap of financial management subsidiaries that have disclosed data is large.
Specifically, in 2020, Zhaoyin financial management, a financial management subsidiary of China Merchants Bank, temporarily ranked first in the list with a net profit of 2.453 billion yuan; the Bank of communications financial management, a subsidiary of Bank of communications, ranked second with a net profit of 665 million yuan in 2020; the new financial management subsidiary of China CITIC Bank, Xinyin financial management, performed well with a net profit of 595 million yuan, ranking third.
Then, the financial management subsidiary of Everbright Bank achieved a net profit of 564 million yuan; the financial management subsidiary of ICBC achieved a net profit of 408 million yuan; the financial management subsidiary of CCB achieved a net profit of 335 million yuan; the financial management subsidiary of Ping An Bank, which opened in August 2020, achieved a net profit of 165 million yuan.
Referring to the profit gap of the above-mentioned financial management subsidiaries, bu Zhenxing, a senior researcher of Beijing read Research Institute, said that after the establishment of financial management subsidiaries, they are facing fierce competition, which includes competition between financial management subsidiaries, and competition from funds, securities companies, asset management and other institutions. With the increasing competition, Matthew effect appears, while the financial management subsidiaries of state-owned banks change The advantages of joint-stock commercial banks are obvious.
It is understood that at present, the profit of financial management subsidiary mainly includes management fee income, self investment income, consulting fee income, etc. Among them, the operating revenue of CMB financial management will reach 3.772 billion yuan in 2020, of which 3.464 billion yuan will be obtained from the management fees of products entrusted by CMB, accounting for 91.83%.
It can be found that at present, the vast majority of the income of CMB’s financial management comes from the management fee income of the products transferred from the parent bank. Under the new asset management regulations, with the smooth transition of financial management transformation, how the company’s profit level will change also attracts market attention. For this, the reporter of Beijing business daily tried to interview CMB’s financial management, but as of press release, no reply has been received.
“Before CMB, the scale of financial products was very large. After transferring from the parent bank to the financial subsidiary, CMB will gradually connect these customers with new products, and there will be no obvious decline in revenue after that.” Some banking analysts told Beijing business daily.
In Bu Zhenxing’s view, the current income from escrow products accounts for a relatively high proportion, which is an inevitable manifestation of the transformation. With the smooth transition of products, the main source of income for financial management subsidiaries is to rely on the income from management fees, and the income of financial management subsidiaries with strong operating ability will perform well.
Faster transformation of equity bank
With the disclosure of the bank’s annual report, the “progress bar” of the bank’s financial product reform and transformation has recently emerged. After the release of the new asset management regulations, the scale of bank breakeven financial products has dropped rapidly, and the proportion of net worth products has increased significantly.
From the perspective of the progress of the transformation of financial products’ net value of A-share listed banks, the progress is different. Among them, the joint-stock banks are relatively “small and easy to turn around”, and the proportion of the net value is prominent.
Specifically, the balance of net worth products of China Construction Bank at the end of 2020 is 293.929 billion yuan, accounting for 19.24% of all kinds of financial products; the average balance of net worth financial products of Bank of communications is 572.763 billion yuan, accounting for 52.36% of the group’s off balance sheet financial products; the balance of net worth financial products of China Everbright Bank is 503.552 billion yuan, accounting for 60.21% of non breakeven financial products; the balance of personal financial products of Shanghai Pudong Development Bank is 992 billion yuan The proportion of the balance of new net worth financial products in personal financial management rose to 67%; the scale of net worth financial products of China CITIC Bank reached 722.824 billion yuan, accounting for 70%; the scale of net worth financial products of Ping An Bank reached 463.528 billion yuan, accounting for 71.5% of the balance of non breakeven financial products.
According to regulatory requirements, the transition period of the new asset management regulations will end before the end of 2021, which means that the stock of old products must be converted into new products for net worth management before the end of 2021.
“At present, all financial management subsidiaries are actively promoting the transformation. According to the requirements of the new asset management regulations, the transformation will be completed by the end of 2021. At that time, except for some stock assets that are difficult to digest, most of the products of financial management subsidiaries will be net worth.” So says Bu Zhenxing. In order to meet the regulatory requirements as soon as possible, bu Zhenxing pointed out that at present, banks and financial management subsidiaries should first resolve the existing assets; second, new products and new assets should strictly meet the requirements of the new asset management regulations to reduce the pressure of secondary rectification; third, they should do a good job in investor education.
Create diversified product layout
It has been nearly two years since the first batch of bank financial management subsidiaries were approved to open business on May 20, 2019. The market has also paid close attention to the product issuance situation of each financial management subsidiary and the highlights of the next product issuance.
According to the data of China financial network, Beijing Business Daily found that as of March 28, 2021, there were 3896 financial products registered by bank financial subsidiaries.
As far as the nature of investment is concerned, the main products issued by financial management subsidiaries include fixed income products, equity products and mixed products. At present, fixed income products account for the main share, with a total of 3087 products issued, accounting for nearly 80% of the total number issued; the number of mixed financial products with some equity assets has gradually increased, reaching 801; only 8 equity products have been issued, including 3 issued by Everbright financial, 2 issued by Zhaoyin financial, ICBC financial, Xinyin financial and Huaxia financial Both issued a pure equity product.
With the domestic fixed income financial products under pressure and the stock market picking up, some bank financial subsidiaries have been increasing the layout of equity products. Some people in the banking industry told Beijing Business Daily that this year, the financial management subsidiary will continue to increase the allocation of major types of assets, and the equity market is undoubtedly an important choice. Of course, the strength of the final investment depends on the performance of the equity market.
At the same time, in terms of diversified product layout, some financial management subsidiaries also strive to create a full product line and characteristic product types to provide investors with a full range of asset value-added services.
Everbright Bank mentioned in its annual report that in 2020, Everbright finance will make every effort to build a “colorful sunshine” product system, issue theme financial management such as pension customer group, salary management, children’s growth, health and safety, ESG, etc., launch characteristic products such as direct stock investment, stock index, gold link, and buy from one cent, and increase the distribution of rights and interests, with sunshine red health and safety, enhanced dividend, and ESG selection And other equity products performed well.
ICBC mentioned in its annual report that ICBC’s financial management continued to optimize its business structure and product layout, and steadily promoted the proportion of non cash, mixed, medium and long-term limited products. We will continue to consolidate the core advantages of fixed income and project investment, actively cultivate multi asset, equity, quantitative and cross-border investment capabilities, and promote the overall stable growth of net product value.
Referring to the product layout and promotion of the financial management subsidiary in 2021, Liu Hui, assistant to the president of China Merchants Bank, said at the bank’s 2020 performance conference that regarding the product layout of the financial management subsidiary this year, the financial management positioning of China Merchants Bank is a full product line and all-round asset management institution. From the existing customer group structure of CMB financial management and the essential characteristics of CMB’s retail channel, the company takes cash management products as its main products; the second major category is “fixed income +” and multi asset products, which are the traditional advantages of CMB; another one is the customized products cooperating with CMB’s retail channel, combined with the portraits of CMB’s retail customers, according to the customer group For example, this year’s very important target layout is pension products; in addition, there are alternative products, cross-border products, hedge fof, passive investment, equity products, etc., which will be the future strategic layout arrangement. At present, the promotion of the whole product line is relatively good.
Beijing Business Daily reporter Meng fanxia Ma Di
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