China: Overseas Banks Grab Bigger Share (ShanghaiDaily.com)

By Zhang Fengming

OVERSEAS banks grabbed a bigger slice of the yuan wealth management products market in Shanghai in the first half of the year, the local regulator said yesterday.

Nine overseas banks, including HSBC, Citi, Standard Chartered and Bank of East Asia, had launched yuan-backed wealth management products by the end of June with an outstanding products value of 7.3 billion yuan (US$1.06 billion), up 65.82 percent from the beginning of the year, said the Shanghai Bureau of the China Banking Regulatory Commission.

The outstanding products value grew 3.76 times the level of a year ago. Overseas banks took in 5.14 billion yuan in the first half, already more than last year's total, the local banking watchdog said.

"Domestic banks still lead the yuan wealth management products market," said the regulator. "However, the rapid expansion recorded by overseas players is worth more attention."

Yuan-backed products contributed 78.06 percent of the total wealth management products in the city in terms of outstanding value. Yuan products accounted for 84.91 percent of products launched in the first six months.

Overseas currency-denominated products grew sluggishly in the city.

Overseas banks dominate in the structure products and qualified domestic institutional investors, while domestic banks have a bigger say in the trust-investment and currency products.

With more overseas banks offering yuan-backed trust products and more lining up to do so, this may change. Overseas players accounted for 49.53 percent of the city's total structured products, such as those linked to stock or commodities, with an outstanding products value of 13.2 billion yuan.

New products launched in the first half of this year have already surpassed last year's total in value.