Sales of wealth products rocket up

By Zhang Fengming  |   2008-6-26  |     NEWSPAPER EDITION

SALES of individual wealth-management products in Shanghai surged in the first quarter, the banking regulator said yesterday.

Banks are shifting to more stable fixed-income products this year.

Banks issued 85.1 billion yuan (US$12.4 billion) of individual wealth-management products in the first quarter, 65.4 billion of which is yuan-backed products, said Yan Qingmin, head of the Shanghai Bureau of the China Banking Regulatory Commission, yesterday on a forum hosted by Eastmoney.com.

Last year, the products topped 107.6 billion yuan, up 57 percent since the year previously. Shanghai sales accounted for about one eighth of the nationwide market.

The value of wealth-management products more than doubled to 819 billion yuan last year China.

While the market is growing rapidly, challenges also loom with the limited type of products, said analysts.

In April, the China Banking Regulatory Commission listed the main problems in wealth-management products after clarifying rules on the sector to halt misleading sales.

Banks have to set a threshold of 50,000 yuan on wealth-management products to rule out small-cap investors who are more vulnerable to risks.

Zhang Xuyang, deputy general manager of retail banking at China Everbright Bank, said the bank will focus more on fixed-income products amid the capital-market turmoil.

In March, the Beijing-based bank stopped offering new-share products which collect clients' money to bid on new shares. "The resumption of the products depends on market conditions," Zhang said.