Reporter Qin Yufang reported from Guangzhou
With the disclosure of the first quarter financial reports of listed banks, the weak growth rate of the revenue business has emerged, especially the decline in fund sales revenue has affected the overall wealth management performance. The financial reports of a number of banks that disclosed wealth management performance data showed that the income of wealth management fee business declined in the first quarter, and some banks experienced double-digit declines.
It is understood that the downturn in the capital market is an important reason for the weakness of bank wealth management revenue. Some bank-related business people said that since the beginning of this year, the capital market equity and debt "double killing", resulting in large fluctuations in the income of products involving stock market and bond market asset allocation, affecting investors' willingness to invest in related products. At the same time, it is expected that the capital market will remain volatile in the short term, and the consignment business, as an important part of the revenue business, is also facing revenue pressure.
In order to buffer the pressure on the agency business brought about by the downturn in the capital market, banks have fine-tuned the promotion strategy of consignment products, many banks have increased the promotion of insurance policies, and the growth rate of insurance revenue of various banks in the first quarter has expanded, and some banks have increased by more than 60% year-on-year.
Wealth management revenue is now in double digit declines
As of April 28, 15 listed banks had disclosed their first-quarter financial reports. From the perspective of banks that have disclosed the performance of wealth management, due to the fluctuations in the capital market, the growth rate of large wealth management revenue of commercial banks in the first quarter of 2022 declined, or even decreased year-on-year.
According to the first quarter financial report data, in the downturn of the capital market, China Merchants Bank's wealth management income in the first quarter declined, achieving wealth management fee and commission income of 10.429 billion yuan, a year-on-year decrease of 11.11%.
Ping An Bank's financial report also shows that in the first quarter of 2022, the bank achieved wealth management fee income (excluding personal precious metals business) of 2.244 billion yuan, which fell by 6.8% year-on-year due to the active pressure drop on the scale of non-standard products and the decline in fund sales caused by fluctuations in the securities market.
The year-on-year decline in agency fund revenue was more pronounced. According to the financial report, in the first quarter, China Merchants Bank achieved agency fund income of 1.727 billion yuan, down 58.5% year-on-year; Ping An Bank achieved agency fund income of 1.086 billion yuan, affected by market factors, down 10.1% year-on-year.
Guosen Securities Research Report pointed out that the net fee income of Bank of Ningbo in the first quarter of 2022 increased by 0.9% year-on-year, and the growth rate fell sharply from the annual report, which is expected to be mainly due to the weakening of the capital market and the high base last year, and the growth rate of income such as wealth management and wealth management fell.
The impact of capital market fluctuations on high-risk products such as funds and wealth management with "rights" is highlighted. The relevant person in charge of China Merchants Bank previously said at the bank's press conference that the capital market in the first quarter of this year was turbulent, encountering the "double kill" of the stock market and the bond market, which would have a greater impact on the funds, wealth management and other businesses sold by the bank, making the bank's fund sales revenue throughout the year may face pressure.
Liao Zhiming, chief analyst of the banking industry of China Merchants Securities, believes that the recent capital market has fluctuated greatly, especially the stock market correction is obvious, which has a great impact on the sales of funds, especially involving products invested in the stock market. At the same time, with the end of the transition period of the new asset management regulations, the basic net worth of bank wealth management is fully net, and the income situation in the environment of market fluctuations is not ideal. In the short term, funds with high equity asset allocation, bank wealth management products, etc. have broken the net, which affects the enthusiasm of investors to subscribe and has a greater impact on the sales revenue of bank-related business lines.
Wind data shows that as of April 28, there were 1,766 wealth management products with a cumulative unit net value of less than 1. The number of net worth wealth management nets has decreased from March, but it has still increased significantly from the beginning of the year.
Puyi standard data shows that as of April 25, 2022, 32,820 of the total 38,709 surviving products disclosed their net value since 2022, accounting for 84.79%. Among them, the "net breaking" products with a net book value of less than 1 accounted for 5.1%, and the "broken net" products of mixed and equity products accounted for 31.3%.
Puyi standard monitoring data also shows that in the first quarter of 2022, a total of 9093 new bank wealth management products were issued, and the product issuance decreased by 2198 models month-on-month, of which 8600 new net worth products were issued, accounting for 94.58%. From the perspective of product types, fixed income products accounted for 94.19%, and the average performance benchmark of its closed net worth products was 4.18%, down 0.01 percentage points from the previous month.
A large bank retail business person told the "China Business News" reporter that from the current situation, the capital market will continue to fluctuate in the short term, investors' risk appetite will continue to decline, as an important part of the bank's mid-income business, the consignment business of funds, wealth management and other products will continue to be affected.
The wealth manager of a joint-stock bank revealed that the recent market situation is not good, the income of funds, bank wealth management and other products is general, many net worth products have floating losses or even actual losses, and the enthusiasm of customers to buy is not high. "In recent months, various products are not easy to sell, funds, financial management is more obvious, but also some large certificates of deposit, real-time withdrawal of wealth management products and so on." The wealth manager said.
Insurance and "fixed income +" financial consignment sales efforts have increased
From the perspective of investors, driven by the downward risk, the attention to investment products has shifted, and low-risk products are more favored.
Wang Liting, a researcher at Puyi Standard, said that since the beginning of this year, the volatility of the stock market has increased, there has been a sharp correction in many sectors, some equity products have broken the net, and investors' risk appetite has declined, making the "fixed income +" wealth management products with more controllable risks more favored.
Wang Liting pointed out that from the perspective of product characteristics, "fixed income +" products allocate most of the funds to bond assets with controllable risks to obtain a stable niche; allocate a small amount of funds to relatively higher risk assets such as stocks and convertible bonds, and appropriately win excess returns. Overall, the risk and return of the "fixed income +" product are relatively moderate, in line with the investment preferences of bank wealth management investors at this stage, with a wide customer base, so it is sought after by the market.
At present, the main product strategy of some banks on the channel side is also being adjusted in a timely manner. According to a retail business source at the Guangzhou branch of a joint-stock bank, funds and wealth management products have not been sold recently, and banks have increased the promotion of some fixed income wealth management products, insurance products and fixed deposit products with short cycles and relatively stable incomes, and have recently sold more large-value certificates of deposit.
Liao Zhiming said that at this stage, the capital market is volatile, and the products with equity asset allocation are more obviously affected, and in the short term, banks sell more insurance products with stable income, which is also a good choice for alleviating the pressure of banks' short-term revenue from the business.
According to the financial report data, in the first quarter, China Merchants Bank's agency insurance income was 5.471 billion yuan and agency wealth management income was 1.765 billion yuan, an increase of 61.6% and 29.7% respectively year-on-year. From the perspective of product structure, China Merchants Bank has made efforts to make low-risk products such as time deposits and wealth management, and the bank achieved a 16% increase in personal fixed deposits in the first quarter.
Ping An Bank also made it clear in the financial report that in the first quarter, the bank achieved agency insurance and agency wealth management revenue of 46.0% and 23.2% year-on-year, respectively, helping the overall income of wealth management to maintain resilience.
The person in charge of the relevant business of Ping An Bank previously stressed at the annual report press conference that with the transformation of the development model of the insurance industry, the advantages of banking channels are emerging, and the development space of the bancassurance business is very large, which is also one of the key points of the development of the bank's revenue business in the next step.
At the same time, banks are also accelerating the layout of consignment channels and strengthening the penetration of consignment sales of funds and other products into long-tail customers. Ping An Bank stressed in the report that under the weak market conditions in the first quarter, the bank's public fund sales business focused on improving the scale of customers, exerting efforts on online platforms, and achieving rapid penetration of medium and long-tail basic customer groups. As of the end of March 2022, the number of clients holding positions in non-monetary public funds represented by the bank increased by 24.4% from the end of the previous year.
Liao Zhiming believes that the volatility of the capital market will have a phased impact on the wealth management business of banks, and there will be temporary fine-tuning in terms of product sales focus, but there will not be much adjustment in the long run.
(Editor: Cao Chi Proofreader: Yan Jingning)