INVESTMENT BANKING | Staff Reporter, Singapore

Chinese private banks lead Asia's wealth management business

The assets of top Chinese onshore private banks grew 25.5% whilst Asia rose by a mere 7.4% in 2013-2017.

Domestic Chinese private banks continue to lead the growth in Asia’s private banking business, according to a report from Asian Private Banker.

This comes as the assets under management of Chinese banks grew at a CAGR of 25.5% from 2013-2017 versus Asia which rose only by a mere 7.4% over the same period.

AUM growth in Asia was led by strong NNA inflows from the Greater China market even as growth rates for the industry as a whole slowed with regulators halting the sale of wealth management products amidst a shadow banking crackdown.

Also read: Check out how China's shadow banking products shrank in 2018 

The balance of WMPs significantly slowed down after growing by a measly 1.7% YoY in 2017 from the 23.6% YoY growth rate recorded in 2016 and its share in the GDP also falling from 39.5% in September 2016 to 35.7% in December 2017, according to a report from BMI Research.

“We expect the regulators to continue to restrain the availability of cheaper funding to smaller banks, which will reduce their ability to undertake risky investments that are considered as shadow loans. For example, wealth management products, which are often used as a source of cheaper funding for joint-stock banks, have seen their growth cool aggressively over the course of 2017,” the report added.

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