Banks are prohibited from collecting savings at high interest rates through "manual interest payments".

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China Research Network

Banks have been banned from soliciting savings at high interest rates through "manual interest payments". The "Initiative on Prohibiting the Acquisition of Savings through Manual Interest Replenishment and High Interest Rates and Maintaining the Competition Order of the Deposit Market" issued by the self-discipline mechanism for market interest rate pricing clearly points out that manual interest replenishment is a correction of business operation errors, and should not be alienated into a violation of circumvention of internal pricing authorization and the implementation of disguised interest rate subsidies. Therefore, banks should strictly regulate the authorized management of deposit interest rates, and ensure that interest rate pricing, interest payment, accounting and statistics are in compliance and orderly.

The Initiative requires banks to immediately conduct self-inspections and complete rectification by the end of April 2024. The bank shall not pay the interest payment commitment made in violation of the previous regulations. This measure aims to further standardize the order of competition in the deposit market, strengthen the internal control and compliance management of bank liabilities, and maintain the stability and healthy development of the financial market.

In recent years, it has been used by some banks to collect savings at high interest rates, which not only increases the cost of liabilities of banks, but also may raise the interest rate of corporate and personal loans, affecting the sustainability of financial support for the real economy. At the same time, this behavior has also had a certain impact on the order of the financial market, leading to the intensification of disorderly competition among banks.

Therefore, prohibiting banks from collecting savings at high interest rates through manual interest rate replenishment is a necessary measure to maintain the stability and fair competition of the financial market. Banks should actively respond to the initiative, strengthen internal management, standardize business operations, and ensure compliance operations.

According to the report written by the China Research Institute of Puhua Research Institute:

Last week, the LPR quotation was released in February, and the 5-year LPR was sharply reduced by 25 basis points, and a number of small and medium-sized banks then quickly lowered the deposit interest rate "interest margin". Interviewed industry insiders said that the decline in LPR interest rates will drive the interest rate center of the whole society downward, which also means that it will be more difficult for bank wealth management, which has traditionally been dominated by fixed income, to further tap excess returns.

A number of interviewed industry insiders said that for wealth management companies, the decline in deposit interest rates is a challenge and an opportunity. The relevant person in charge of CMB Wealth Management believes that the reduction of deposit interest rates has led to a decline in the attractiveness of deposit products, and the demand for the allocation of wealth management products has increased, and the industry will usher in a period of development opportunities.

CITIC Securities is even more optimistic that in 2024, it may still promote several rounds of deposit interest rate reductions, when the advantages of wealth management income will be more prominent, and the yield of some high-quality cash wealth management products may outperform the 3-year fixed deposit rate. It is expected that driven by state-owned banks, the scale of wealth management will regain its position at the 30 trillion yuan mark in the second half of 2024.

At present, the bank wealth management market is showing a warming trend, and after experiencing the impact of the "net breaking tide" in 2022, as the bond market continues to strengthen, the performance of wealth management products has begun to improve, and the attractiveness has rebounded. A number of bank wealth management companies have raised the upper limit of their wealth management products, showing the recovery of market confidence.

However, investors' acceptance of products with large fluctuations in net value has decreased, and there is a lack of confidence in products with a high correlation with stocks and bonds, which has affected the market's investment risk appetite to a certain extent. At the same time, for a long time, the characteristics of "guaranteed principal and guaranteed returns" of bank wealth management have been deeply rooted in the hearts of the people, but after the implementation of comprehensive net worth and the breaking of rigid redemption, investors have insufficient understanding of the volatility and risk of net worth products, and the acceptance is not high, which is also a challenge faced by the current market.

In addition, the bank wealth management market is also facing the problem of "asset shortage". Due to the decline in the expected return of the underlying assets, the performance benchmark of wealth management products has continued to decline, reflecting the current dilemma of the lack of high-coupon assets in the wealth management market. It is expected that this "asset shortage" situation may continue in the future, and the specific time will be affected by factors such as economic recovery, policy adjustments, and changes in supply and demand.

In this context, bank wealth management recommends buying short rather than long, and investors should make investment decisions more prudently and prudently. At the same time, banks should also strengthen investor education, improve investors' understanding and acceptance of net-worth products, and promote the healthy development of the market.

Overall, the bank wealth management market is in a complex and volatile stage, with signs of recovery, but also some challenges and uncertainties. Both investors and banks need to pay close attention to market dynamics and flexibly adjust their strategies to respond to possible risks and opportunities.

As of February 21, the estimated wealth management scale has risen to around 27.5 trillion. Wang Yifeng, chief analyst of the financial industry of Everbright Securities, also said that after the state-owned stock bank lowered the deposit listing interest rate in December 2023, the interest rate of time deposits of various maturities fell to less than 2% (inclusive), and some small and medium-sized banks will follow up at the beginning of 2024, and the attractiveness of alternative deposit asset management products represented by low-volatility and stable wealth management will be enhanced. At the same time, the implementation of the "integration of newspapers and banks", coupled with the reduction of the predetermined interest rate of insurance, the pressure on the AUM of wealth management by competing products such as savings insurance has decreased.

The wealth management product industry has developed rapidly in recent years, and the market scale has been expanding, becoming an important part of the financial market. With the development of the domestic economy and the growth of residents' wealth, investors' demand for wealth management products is increasing. The market size is expanding year by year, and new products are constantly emerging, meeting the risk appetite and return expectations of different investors.

In order to attract more investors, the wealth management product industry continues to innovate products. From traditional fixed income products to structured products, equity pledge products, etc., the design of wealth management products is increasingly diversified to meet the personalized needs of investors.

With the development of science and technology, especially the application of big data, artificial intelligence and other technologies, the wealth management product industry has achieved more accurate risk assessment, more efficient asset allocation and better service experience. These technologies have improved the investment efficiency and user experience of wealth management products.

Looking ahead, with the continuous development of science and technology and the further improvement of regulatory policies, the wealth management product industry will continue to maintain a healthy development trend. At the same time, with the continuous change of investor demand and changes in the market environment, the wealth management product industry will face new challenges and opportunities. The industry needs to continuously innovate and improve service quality to adapt to market changes and meet the needs of investors.

In short, the wealth management product industry has shown a good development trend in terms of market size, product innovation, and technological development. In the future, the industry will continue to maintain a healthy development trend and provide investors with more investment options and better service experience.

In 2023, the role of bank wealth management as a "reservoir" of deposits will be highlighted, and the new product structure will be dominated by cash management and other fixed income products. Funds with low risk appetite have poured into the wealth management market, and investors' demands for low volatility and stable returns on wealth management products have become clearer. Combined with the impact of the previous "net breaking" of some wealth management products, wealth management investors with relatively high-risk preferences also hope to reduce the fluctuation of the net value of products while increasing returns.

With the recovery of the capital market and the launch of various equity wealth management products, investors' willingness to allocate equity assets is gradually increasing.

Yu Fenghui, an economist and new finance expert, pointed out that wealth management companies are actively launching more wealth management products with rights recently, which usually combine fixed income assets with equity assets to achieve a balance between risk and return. Products that emphasize absolute return strategies, as well as equity or hybrid wealth management products with low volatility and stable characteristics, are more favored by investors.

In the fierce market competition, whether enterprises and investors can make timely and effective market decisions is the key to success. The report on the wealth management product industry written by China Research Network makes a specific analysis of the development status, competition pattern and market supply and demand situation of China's wealth management product industry, and analyzes the opportunities and challenges faced by the industry from the aspects of the industry's policy environment, economic environment, social environment and technical environment.

At the same time, it reveals the potential demand and potential opportunities of the market, provides accurate market intelligence information and scientific decision-making basis for strategic investors to choose the appropriate investment time and the company's leadership to make strategic planning, and also has great reference value for government departments.

If you want to know more about the professional analysis of the wealth management product industry, you can click to view the report written by the China Research Institute of Puhua Research Institute, and this report also contains a lot of data, in-depth analysis, professional methods and value insights, which can help you better understand the trends, risks and opportunities of the industry.

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