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May 23, 2017

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Interbank wealth products’ value soars

CHINA’S interbank wealth-management products nearly doubled to 5.99 trillion yuan (US$870 billion) last year which lifted the total value of such products over 20 percent to 29.1 trillion yuan by 2016, an official report showed.

The value of the products rose from nearly 3 trillion yuan in 2015 and 490 billion yuan in 2014, according to data compiled by China Banking Wealth Management Registration System.

However, Zhang Jianhua, president of Huaxia Bank, recently said: “The high-speed growth in interbank wealth-management products will no longer exist. The scale of such business will shrink sharply this year due to the regulator’s push to deleverage the financial system.”

China’s central bank is pursuing a stricter macro-prudential assessment on the banking system amid a campaign to curb financial risk.

The financial regulators have tightened pace of coordinated actions to tame the country’s ballooning wealth-management products.

Banks, trusts, brokerages, insurers and funds will be barred from cross-holding wealth-management products managed by each other, according to joint rules drafted in February by the central bank and three other financial regulators.

Institutions will be banned from investing in non-standard credit assets, mostly loans, or in beneficiary rights linked to such assets.


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