Banks tap sales to meet goal
By Hu Xiaocen |
January 12, 2012, Thursday
|
Print Edition
Print Edition
BANKS have been busy selling wealth management products to customers since the beginning of this year as they aim to attract deposits and meet their sales target for January ahead of the Chinese New Year.
To attract savers, banks have packaged various wealth management products which offer customers higher returns and are more flexible compared with traditional term deposits.
"Attracting deposits is an ongoing task, and never an easy one," said a customer relationship manager of the Industrial and Commercial Bank of China, who declined to be named. "Currently, the products available on the market are pretty similar. Most of them have a threshold of 50,000 yuan (US$7,920), and terms vary from 35 days to six months."
A Bank of Communications wealth management salesperson said: "Only three working days are left after the (week-long) Chinese New Year's holiday in January, so we are under pressure to meet the target for January before the festival that falls on January 23."
China's benchmark one-year deposit rate is 3.5 percent but its inflation was 4.2 percent in November, which means savers are facing a negative savings rate. This drives them to seek other channels which offer higher returns than just putting money in the banks.
For instance, a 35-day product sold by the Bank of China bears a maximum annualized return of 4.8 percent. If a customer places a deposit that exceeds 2 million yuan, the bank is able to offer its best rate of 5.1 percent.
The other banks are also selling similar products that offer high returns.
China Everbright Bank sold a product which offered a maximum 5.8 percent annualized return to customers who placed a deposit 5 million yuan or more for 56 days.
To attract savers, banks have packaged various wealth management products which offer customers higher returns and are more flexible compared with traditional term deposits.
"Attracting deposits is an ongoing task, and never an easy one," said a customer relationship manager of the Industrial and Commercial Bank of China, who declined to be named. "Currently, the products available on the market are pretty similar. Most of them have a threshold of 50,000 yuan (US$7,920), and terms vary from 35 days to six months."
A Bank of Communications wealth management salesperson said: "Only three working days are left after the (week-long) Chinese New Year's holiday in January, so we are under pressure to meet the target for January before the festival that falls on January 23."
China's benchmark one-year deposit rate is 3.5 percent but its inflation was 4.2 percent in November, which means savers are facing a negative savings rate. This drives them to seek other channels which offer higher returns than just putting money in the banks.
For instance, a 35-day product sold by the Bank of China bears a maximum annualized return of 4.8 percent. If a customer places a deposit that exceeds 2 million yuan, the bank is able to offer its best rate of 5.1 percent.
The other banks are also selling similar products that offer high returns.
China Everbright Bank sold a product which offered a maximum 5.8 percent annualized return to customers who placed a deposit 5 million yuan or more for 56 days.
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