As of March 27, some operating data of 11 bank financial management companies have been released.
Among them, seven companies that disclosed their operating results with the parent bank’s annual report recorded a strong increase of more than 30%, but this was due to the late opening and small base of many companies. The increase of 2-8 times of net profit was more inclined to “passive” growth.
another four financial companies that disclosed their annual reports on their parent bank’s official website soared last year due to the accelerated injection of parent bank transformation products and the acceleration of independent issuance. However, a prominent feature is that the proportion of equity is still small
In this year, a series of principled changes such as asset and product term matching and valuation method rectification (amortized cost method to market value method) have made the impact of market fluctuations on bank financial management appear unreservedly. In March, the net value of nearly 2000 bank financial products on the market fell below 1.
In this context, more than a dozen bank financial management companies collectively shouted to the market and called for a rational view of short-term fluctuations; At the same time, the “self purchase mode” was opened with self operated funds, and Everbright financial management, Nanyin financial management and China post financial management invested 200 million yuan, 500 million yuan and 650 million yuan respectively to purchase their own financial products.
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(I) strong “passive” profitability
many financial management companies have recently been labeled as “making a lot of money”. It should be noted that this is because most companies open late and have a low base, so the increase of net profit is more “passive” and strong
As of March 26, the operating performance of seven financial management companies, including Ping An financial management, CMB financial management, Xinyin financial management, xingyin financial management, BOCOM financial management, Everbright financial management and Qingyin financial management, was disclosed with the annual report of the parent bank. An obvious feature is that their net profit has increased by two to eight times, and some even increased by more than 130 times.
The profit growth rate reached more than twice and eight times that of Xinyin financial management and Ping An financial management, both of which were opened only after July 2020. In other words, the profit period of both companies in the first year of operation is less than 5 months, and they are still in the investment period of personnel recruitment and system construction. In addition, BQD financial management, whose net profit increased by 135 times in 2021, opened later and only opened in November 2020, so the profit of that year can be ignored.
bocom Wealth Management under Bank Of Communications Co.Ltd(601328) achieved a net profit of 1.155 billion yuan in 2021, an increase of 73.6% year-on-year. The scale of its financial products increased by 129.43% over the end of the previous year to 1224664 billion yuan.
Let’s take a look at the “top” of financial management companies China Merchants Bank Financial Management . In 2021, the company’s net profit reached 3.203 billion yuan, a year-on-year increase of 30.6%; At the end of last year, the balance of products managed by China Merchants Bank reached 2.78 trillion yuan, an increase of 13.47% over the end of the previous year. Among them, the balance of new products was 2.60 trillion yuan, accounting for 93.53% of the balance of financial products.
Two joint-stock financial companies made strong efforts last year: xingyin financial ranked second among the seven banks with a net profit of 2.806 billion yuan, with a year-on-year increase of 108.62%, and the balance of financial products reached 1.79 trillion yuan, a year-on-year increase of 21% China Everbright Bank Company Limited Co.Ltd(601818) net profit increased by 181.21%, net profit was 1.586 billion yuan, and the balance of financial products exceeded trillion yuan last year, reaching 1067.7 billion yuan, of which net worth products accounted for 94%.
Let’s look at the late opening Ping An financial management and Xinyin financial management : Ping An financial management generated a net profit of 1.616 billion yuan last year, an increase of about 880% over the previous year, and the scale of financial products increased by 34.5%, reaching 872066 billion yuan. Last year, Xinyin wealth management achieved a revenue of 3.04 billion yuan, an increase of 212%, and a net profit of 1.806 billion yuan, an increase of 203.5%. Due to the smooth handover of its parent bank’s wealth management products to wealth management companies, its product balance has reached 1403275 billion yuan.
Bank of Qingdao Wealth Management is the first city commercial bank wealth management company to disclose its performance. The company opened in November 2020 and realized a net profit of about 3 million yuan in that year. In 2021, the company achieved a revenue of 616 million yuan and a net profit of 408 million yuan. In terms of financial management scale, the balance of the company at the end of last year was 167804 billion yuan, and net worth financial products accounted for 100%.
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(II) there is still a long way to go to improve rights and interests
In addition to the seven companies that have disclosed the annual report, ICBC financial management, China Post Financial Management and Huihua financial management also publish the annual report on the official website. From their product structure and asset structure, it can be clearly felt that even if the industry has shouted “increasing the proportion of equity” for a year, in fact, the proportion of bank financial equity is still very small, and the path of equity allocation is long.
By the end of December 2021, ICBC Wealth Management had 1510 existing wealth management products, with a time balance of 2021804 billion yuan, all of which were net worth products meeting the requirements of the new regulations. According to the nature of investment, there are 961 fixed income products, with an amount of 1.8 trillion yuan, accounting for 89.03%; 499 mixed products, with an amount of 217276 billion yuan, accounting for 10.75%; 50 equity products, with an amount of 4.445 billion yuan, accounting for only 0.22%;
China Post Wealth Management has 255 existing products, with a balance of 655.31 billion yuan at the end of 2021, a significant increase of about 156% over the previous year. In terms of investment nature, the fixed income category is still the absolute mainstream of the company. There are 193 products with an amount of 632013 billion yuan, accounting for 96.45%. The amounts of equity and mixed categories are only 13.767 million yuan and 23.28 billion yuan respectively, and the proportion of equity is almost negligible.
In addition, Huihua Wealth Management , the first Sino foreign joint venture wealth management company to disclose the scale, has a surviving product scale of 78.207 billion, of which the fixed income category accounts for the absolute majority, 77.29 billion yuan, the mixed category is 917 million yuan, and the equity category accounts for 0%.
According to the annual report of Bank Of China Limited(601988) industry financial market (2021) recently released by China financial network, the survival scale and proportion of bank financial fixed income financial products showed an upward trend last year, and fixed income products still accounted for the vast majority of the survival scale of financial companies, reaching RMB 159200 million, accounting for 92.62%; The mixed category and equity category accounted for only 7.21% and 0.17% respectively, and the proportion still needs to be improved.
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(III) continuous change of rate structure
In fact, more and more banks are joining the ranks of reducing fees and making profits.
Since the beginning of the year, many companies such as Bank of China financial management, China Post Financial Management, China Merchants Bank financial management, xingyin financial management, Everbright financial management, Huaxia financial management and Nanyin financial management have reduced the rates of dozens of products, involving fixed management fees, sales service fees, custody fees, redemption fees during the event, and some of the rates have been reduced to 0.
Under the background of poor income and slow issuance (according to Puyi standard data, 2302 new products were issued in February, and the circulation decreased by 835 month on month), the reduction of the rate by the financial management company must be considered to promote sales. But more importantly, it shows that bank financial management is trying to further bind the interests of managers and investors and strengthen the consistency of interests.
The Chinese reporter of the securities firm obtained the product rates as of the beginning of March of six state-owned bank financial management subsidiaries of ICBC, Agricultural Bank of China, Bank of China, CCB, Bank of communications and China Post, as well as six joint-stock bank financial management subsidiaries of China Merchants Bank, Everbright, Huaxia, Ping an, Xinyin and xingyin. The data shows that up to now, the average sales rate of fixed income financial management is 0.22%; In terms of fixed management fee, the average management fee of 12 financial management companies is only 0.17%, which is much lower than the general level of 0.2% – 0.5% last year; In terms of custody fees, the average custody fees of fixed income products, mixed products and equity products of 12 financial companies are only 30000.
combines the above-mentioned sales fee, fixed management fee and custody fee, and reduces the average cost of investors’ fixed expenditure to 0.42%. Of course, this only refers to the cost of fixed expenditure, and many products will require additional subscription fees and redemption fees before reaching a specific holding period. According to the current rate, compared with other similar asset management products, bank financial management has been at a lower charge level
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(IV) opening “self purchase” to boost the market
it is worth noting that, on one side, there are wealth management companies with large profits and soaring scale, and on the other side, there is the pessimism of large-scale withdrawal and frequent falling below the net value of wealth management products in the near future
Since March, more than ten financial management companies including ICBC, CCB and bocom have issued documents to communicate with investors to stabilize market confidence. China Merchants Bank Co.Ltd(600036) , Industrial Bank Co.Ltd(601166) , Bank Of Communications Co.Ltd(601328) , etc., which held the annual performance meeting this week, were all asked about the problem of financial net breaking at the performance meeting.
On March 25, bocom business director Tu Hong said at the performance conference of BOCOM: “Since the beginning of this year, due to the conflict between Russia and Ukraine, the interest rate increase expectation of the Federal Reserve, the covid-19 epidemic and other multiple factors, as well as the changes in China’s economic and financial situation, the stock and bond markets in China’s financial market have undergone short-term adjustment, especially the decline in the stock market is obvious. Under this relatively extreme market situation, it is difficult for market participants to be alone, and there has been a certain withdrawal of BOCOM financial products recently.”
He said, however, from the perspective of underlying assets, the vast majority of BOCOM wealth management products are invested in the bond market, and the allocation proportion of the equity market is relatively low. “Therefore, in view of the recent sharp adjustment of market stocks and bonds, we have also carried out targeted product structure adjustment, increased the proportion of low volatility assets, balanced the allocation of our different industries and stabilized the net value of our products,” Tu Hong said.
On March 25, Industrial Bank Co.Ltd(601166) president Tao Yiping said at the performance press conference that Industrial Bank Co.Ltd(601166) also has some financial products with rights, and the net value of some products also fluctuates. He also said: “for the standard asset management industry, it will be a long-term trend to increase the equity proportion of bank financial products. The key lies in whether their professional abilities can be matched quickly. I believe that in the future, with the gradual implementation of investor education, the ability of bank financial customers to accept fluctuations will also be improved.”
In the face of market pessimism, a number of financial management companies have invested hundreds of millions of real money to boost market confidence, and it is the first time that financial management companies have purchased their own financial management.
On March 23, Everbright Wealth Management invested in the “sunshine red” stock type and “sunshine orange” mixed financial products issued by the company with its own funds of no more than 200 million yuan. Just before that, Everbright wealth management issued a document pointing out that the current low position building opportunities may be greater than the risks. At the current time point, the overall valuation of domestic stocks is not expensive, and the allocation value of bonds will also appear after periodic adjustment. With the end of this round of adjustment, I believe persistence is a better choice.
On March 24, Bank of China wealth management said that in line with the principle of sharing risks and benefits with the majority of investors, Bank of China wealth management has invested about 500 million yuan of the company’s own funds to subscribe for / purchase the financial products of Bank of China wealth management. At present, 5 of the 9 hybrid financial products of Bank of China Southern financial management have broken the net.
On March 26, China Post Financial Management as the first large state-owned bank financial management company, made self purchase. China Post Financial said that based on its confidence in the long-term, healthy and stable development of China’s capital market, China Post Financial has applied for the financial products managed by the company with its own funds of about 650 million yuan, and plans to choose the opportunity to apply for the hybrid (Fortune Xinxin Xiangrong and Hongyuan series) and fixed income + (Hongjin Series) financial products managed by the company.
