Original title: Interpretation 丨 January 2021Bank of ChinaIndustry Wealth Management Market Index Source: Puyi Standard

In February 2021, the China Banking Association released the China Banking Industry Wealth Management Market Index Report for January 2021. In response, the Puyi Standard interpreted the changing characteristics of the January index.

1. Bank wealth management price index declined slightly

Figure 1: Bank wealth management income and price index trends

Source: Prudential Standards

In January, the national bank wealth management price index fell 0.15 points to 83.86 points month-on-month, and the level of bank wealth management income fell 1BP to 3.50% month-on-month. Judging from changes in earnings of different types of products, the price index for closed expected return products fell 0.12 points to 89.48 points month-on-month, while the price index for open expected return products fell 0.19 points to 75.43 points month-on-month.

Since mid-January, the central bank's public operation has changed from investment to return, compounding the demand for withdrawals during the Spring Festival. Liquidity is expected to shrink in the short term, and the level of bank wealth management earnings declined slightly from month to month.

Figure 2: Net worth product performance benchmark trend

Data source: Puyi Standard

In January 2021, the National Net Worth Product Comprehensive Performance Benchmark Index rose 9.98 points month-on-month to 89.73 points. The comprehensive performance benchmark for net worth products was 5.09%, up 57 BP from the base period (May 2018); the performance benchmark for fixed income net worth products was 4.50%, up 27 BP from the base period, down 61 BP from the base period; the performance benchmark for mixed net worth products was 7.46%, up 175 BP from month to month; and the performance benchmark for cash management net worth products was 3.02%, up 1 BP from the base period.

2. The bank wealth management issuance index declined

Figure 3: Trends in bank wealth management issuance volume and issuance index

Source: Prudential Standards

In January, the National Bank Wealth Management Issuance Index fell 15.89 points month-on-month to 62.61 points, with an overall circulation of 7035 models, down 1,785 month-on-month.

The share of net worth product subscriptions continues to rise. Judging from the distribution volume (subscription volume) of various products, the share of closed expected revenue products fell 4.58 percentage points month-on-month to 46.25%; the share of open expected revenue product subscriptions increased 2.23 percentage points month-on-month to 21.07%; and the share of net worth product subscriptions increased 2.35 percentage points month-on-month to 32.68%. Overall, the current share of closed expected revenue products has declined, accounting for about 50% of sales; net worth product subscriptions are still relatively low, but there is still a slight increase this month. Considering the official start of the “one-year” countdown of the transition period of the new asset management regulations, the pressure for banks to transform into a net worth type still exists. The number of net worth product subscriptions increased slightly this month, and the issuance of bank net worth wealth management products is still the general trend.

3. Acceleration of bank net worth transformation

Figure 4: Trends in bank net worth product holdings and net worth transformation indices across the country

Source: Prudential Standards

In January, the number of net worth products in the national bank wealth management market was 27,652, an increase of 110 over the previous month. Judging from the performance of the Net Worth Transformation Index, in January, the National Net Worth Transformation Index was 21.92 points, up 1.04 points from the previous month, up 10.17 points from the same period last year.

Judging from the number of net worth products maintained by banks of various types, the number of net worth products maintained by banks nationwide was 9708, down 601 from the previous month; the number of net worth products maintained by urban commercial banks was 12,581, up 345 from the previous month; and the number of net worth products of rural financial institutions was 5,363, up 366 from the previous month. The net worth product holdings of the three types of banks increased and decreased month-on-month. The net worth product holdings of national banks declined significantly in January, while the net worth product holdings of urban commercial banks and rural financial institutions rose slightly month-on-month.

Overall, the degree of net worth transformation of national banks is ahead of other types of banks, but the pace of transformation stagnated in January, while the rate of net worth transformation of urban commercial banks and rural financial institutions continued to increase.