Demand for wealth management surges Banks have performed well in the middle

Reporter Wang Kejin reported from Beijing

Recently, listed banks have successively announced their third quarter results. In the third quarter of this year, the intermediate business income of listed banks maintained growth, and some banks increased significantly, reaching about 50%. Industry analysts believe that this is mainly driven by the wealth management business.

Affected by the transformation of wealth management, fee reductions and profits, and the implementation of new accounting standards for business enterprises, the net income of fees and commissions of many banks has fluctuated before. Wang Yifeng, chief analyst of the financial industry of Everbright Securities, believes that although the overall market interest rate fell in the third quarter and the capital market was adjusted by shocks, the continuous development of wealth management will make the growth rate of bank-related fees have a good resilience. In addition, under the background of the expansion of wealth management product sales channels and the enhancement of residents' awareness of wealth management, banks with strong channel capabilities and good customer base are expected to achieve higher fee income growth.

Looking forward to the future, under the goal of common prosperity, increasing the various property incomes of residents and promoting more low-income people to enter the middle-income ranks will become a new focus of wealth management for financial institutions.

Under the "grasp" of wealth management, banks have increased significantly

Recently, a number of A-share listed banks announced the "report card" for the third quarter of 2021.

It is worth mentioning that the rise in non-interest income has become a trend. In the first three quarters, China Merchants Bank achieved non-interest net income of 100.772 billion yuan, an increase of 21.57% year-on-year, accounting for 40.08% of operating income; Ping An Bank achieved non-interest net income of 37.629 billion yuan, an increase of 17.6% year-on-year; Hangzhou Bank's non-interest net income was 6.601 billion yuan, an increase of 47.97% over the same period of the previous year; Changshu Bank's net fee and commission income in the first three quarters was 190 million yuan, an increase of about 30% year-on-year Changsha Bank's net fee and commission income in the first three quarters was RMB790 million, an increase of about 26% year-on-year.

Ping An Bank said that the rapid growth of non-interest income was mainly due to the growth of fee and commission income and investment income brought about by wealth management business, credit card business, corporate settlement business, wealth management business, etc.

Bank non-interest income refers to operating income other than interest rate differential income, mainly intermediate business income and income generated by consulting, investment and other activities. The intermediate business has the characteristics of low or no capital occupation, good stability, strong sustainability, low risk, etc., and the intermediate business income reflects the core competitiveness and innovation ability of commercial banks to a certain extent, and in recent years, it has been used by many banks as a new growth point for profits. Industry analysts believe that under normal circumstances, banks with richer varieties of intermediate business and a higher proportion can obtain higher ROE, and their market value is more recognized.

Dongxing Securities said in the research report that the wealth management business has the attributes of light capital and weak cycle, which is an important strategic choice for commercial banks to cope with regulatory capital constraints and narrowing pressures on interest rate differentials, and is also a connector linking social assets and funds. Commenting on the third quarter results of China Merchants Bank, it believes that it is expected that under the overall framework of the value cycle chain of large wealth management, the bank's fee income will maintain a high growth trend.

Previously, the Notice on Strictly Implementing the Accounting Standards for Business Enterprises and Effectively Strengthening the 2020 Annual Report of Enterprises (Cai Hui [2021] No. 2) issued in February this year proposed that for financial assets formed by banks engaged in credit card installment repayment business, enterprises should not record their interest income calculated according to the effective interest rate method in the "handling fee and commission income" account or listed in the "handling fee and commission income" item in the income statement. This has led to a decline in the scale of intermediate business income of some banks, coupled with the impact of the epidemic on financial institutions to reduce fees and profits, bank card fee income has also fluctuated, but most industry analysts believe that the wealth management business has driven listed banks to maintain booming growth, making up for the impact of other income declines.

The market for inclusive wealth management has great potential

As the goal of common prosperity is further advanced, the wealth management business of financial institutions will also undergo tremendous changes.

According to the "Research Report on China's Inclusive Wealth Management Market from the Perspective of Common Prosperity" released by the Institute of Finance of the Chinese Academy of Social Sciences on October 22, inclusive wealth management is oriented to low- and middle-income groups, and the current main force is bank wealth management and public funds, which have reached 36% of the asset management industry by the end of 2020, but the proportion of the wealth of residents corresponding to the scale of the two is only 4.4% and 2.9%, and the scale is still very small, which also means that under the goal of common prosperity, The future growth potential and space of inclusive wealth management will be enormous.

On October 24, a reporter from China Business Daily learned from Industrial Bank that Lu Jiajin, chairman of the bank, said at the 2021 Bund Financial Summit that at present, China is entering a historical stage of solidly promoting common prosperity, and it is necessary to focus on improving the inclusiveness of asset management and taking inclusiveness as the foundation of its existence. By vigorously serving the public customer base, closely integrating into rural revitalization, and actively exploring pension asset management, more high-quality asset management products will "fly into the homes of ordinary people", promote the equalization of financial service opportunities between different income groups, between urban and rural areas, and between generations, and introduce more source of living water for asset management. It believes that asset management should conform to the general trend of converting indirect financing to direct financing, further increase the proportion of equity and rights-containing products, enrich the financing channels of the real economy, and effectively grasp the dividends of China's economic transformation and upgrading.

However, inclusive wealth management targets a wide range of people, the average income and wealth level are not high, and the awareness and level of financial management need to be improved. Liu Yinping, an analyst at Rong360 Digital Technology Research Institute, told reporters: "On the one hand, financial institutions should do a good job in investor education, so that the public realizes the importance of wealth management and has a more comprehensive understanding of various financial products; on the other hand, it is necessary to provide efficient and high-quality wealth management services, improve the level of financial technology, and make it easier for ordinary investors to buy financial products suitable for themselves." ”

Liu Yinping analyzed to reporters: "Wealth management products for low- and middle-income people have the characteristics of low threshold, controllable risk, transparent information disclosure, and convenient purchase. Financial institutions should pay attention to the stability of products, mainly invest in medium and low risk standardized assets to meet the wealth management needs of most investors; for a small number of investors with high risk tolerance to launch products, allocate a certain proportion of equity assets to improve the return on investment of products. ”

Dong Ximiao, chief researcher of CmLCC Finance, said: "After the new regulations on asset management and new regulations on wealth management have been issued one after another, the threshold for bank wealth management has been lowered, the degree of investor recognition has increased, and the number of investors has grown rapidly, which has already had the nature of 'inclusive'. ”

Dong Ximiao said: "The next step of wealth management needs to face more customers, banks and other financial institutions in the ideological understanding and business positioning should gradually clarify the meaning of 'inclusive', so that wealth management services cover more groups." It believes that although the single amount of mass wealth management is relatively small, the base is large, the number of transactions is large, the market is huge, and the future may be a blue ocean of competition; and from a practical point of view, the current wealth management business for mass customers is far from enough, and financial institutions should accelerate the layout.

Dong Ximiao suggested: "Banks and other financial institutions should develop products and services suitable for public customers, create an inclusive wealth management system, and the products should be more stable, moderate returns and higher security." In addition, the product manual needs to be transformed, do not have too many technical terms, and be easy to understand. At the same time, it is also necessary to accelerate the cultivation of wealth management talents, not only product managers and wealth managers facing private customers, but also wealth managers who master the knowledge of bank wealth management and sales capabilities, and can communicate well with public customers. ”

In terms of improving the sustainability of inclusive wealth management systems, Dong Ximiao believes that financial technology should be used to promote the digitization of inclusive wealth management systems. "From the perspective of customer experience, customer behavior is changing, more and more customers prefer digital service methods, asset management technology can meet the needs of customers to obtain services anytime and anywhere; from the perspective of product marketing, asset management technology can help asset management institutions break through physical channels and sales personnel shortages to achieve coverage and service to more customers; from the perspective of investment research and development, the use of asset management technology, innovative intelligent investment and other models can enhance investment capabilities and create excess returns for customers; from the perspective of risk prevention and control, With the help of asset management technology, it can monitor the risk indicators of the portfolio in real time, improve the timeliness and accuracy of risk warning and management, and from the perspective of operation management, asset management technology can help save labor costs and improve the efficiency of account management and information disclosure. ”

In addition, Dong Ximiao also stressed that investor education should be strengthened, national financial capabilities should be enhanced, and national wealth management awareness and quality should be enhanced, which he believes is also the basis for the growth of the wealth management market.