SHANGHAI, Jan 30: China’s securities regulator may soon grant five mid-sized Chinese lenders permission to launch fund management companies, in the latest push by regulators to cultivate a slate of integrated, globally competitive Chinese financial institutions.
The Chinese Securities Regulatory Commission recently met with fund-management executives from the five banks to discuss the approval process and hear presentations about the firms’ plans, official media reported on Wednesday.
The banks are Industrial Bank Co Ltd, Bank of Beijing Co Ltd, Bank of Shanghai Co Ltd, Bank of Ningbo Co Ltd, and Bank of Nanjing Co Ltd .
The approval process was likely to achieve significant progress, the official China Securities Journal reported, citing unnamed sources.
Eight large Chinese banks have already established fund management ventures under an existing pilot project. Most are joint ventures with foreign investment banks, including ICBC Credit Suisse Asset Management Co, CCB Principal Asset Management, Bank of China Investment Management, and ABC-CA Fund Management.
Asset management companies linked to banks currently manage about 16 percent of the 2.87 trillion yuan ($461 billion) in total net assets under management by China’s fund industry, according to estimates cited by the paper.
But their market share is growing, thanks in part to their ability to leverage their existing branch networks to market fund products. Assets under management at bank-affiliated fund companies grew 70 percent in 2012, compared to 30 percent growth for the industry as a whole, according to the estimate.
Chinese regulators are encouraging banks to diversify their revenues away from reliance on net income, as China moves to liberalize interest rates.
Under chairman Guo Shuqing, the regulatory commission has moved to develop China’s asset management industry with an eye to improving domestic capital allocation, offering Chinese investors a broader range of investment options, and building globally competitive financial institutions. (agencies)
Trending Now
E-Paper
Follow our WhatsApp channel