China Approves First Two Wealth Management Unit From Joint-Stock Banks Needs an 's' on units.
Duan Siyu
/SOURCE : yicai
China Approves First Two Wealth Management Unit From Joint-Stock Banks Needs an 's' on units.

(Yicai Global) April 19 -- China Everbright and China Merchant Bank have  received the green light to set up wealth management units, making  them the country's first joint-stock banks to receive such approvals  after the big five state banks. 

China's banking and insurance regulator has officially given the go-ahead for  Beijing-based Everbright to invest CNY5 billion (USD746 million) in the  unit, according to a statement. China Merchants is yet to confirm how  much it will sink into the subsidiary but media outlet 21st Century  Business Herald reported that it had received the related approval  also. 

Many  banks are putting in the groundwork for wealth management units as  Chinese savers' demands for investment products are on the rise. The  Industrial and Commercial Bank of China will offer the largest fund for  wealth management at CNY16 billion followed by China Construction Bank  at CNY15 billion. The Agricultural Bank of China, Bank of China and Bank  of Communications are preparing units with funds worth CNY12 billion,  CNY10 billion and CNY8 billion, respectively.

Everbright  issued one-fifth more financial products last year at CNY5.85 trillion,  according to its annual report, while the balance of the bank's  financial products reached CNY1.24 trillion as of the end of 2018.

The approvals mean that other joint-stock commercial lenders are likely to  receive similar licenses from regulators. These can be expected in the  second half of the year, an analyst noted.

The process for setting up such subsidiaries takes place in two stages,  namely, preparation and the start of operations. These units have  six-months to prepare for their establishment after securing the green  light from the China Banking and Insurance Regulatory Commission  through. 

The commercial banks, as the controlling shareholders, need to submit  applications to CBIRC, with the outcome to be determined by a regulatory  review.

Editor: William Clegg

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Keywords: China Everbright Bank , money management