With the release of the semi-annual reports of banks, the first-half performance of bank wealth management subsidiaries has been successively revealed. In the first half of 2024, the performance of bank wealth management subsidiaries generally showed positive growth, with 22 subsidiaries achieving a combined net profit of 14.7 billion yuan, a year-on-year increase of 11.61%. Among them, 17 subsidiaries achieved positive net profit growth, accounting for nearly 80%, while 7 subsidiaries saw a year-on-year net profit growth rate of 20%.

At the same time, the scale of wealth management products has rebounded significantly, with the 25 wealth management subsidiaries that disclosed data managing a total of approximately 24.38 trillion yuan in wealth management products, a 7.6% increase from the end of 2023. Among them, 23 subsidiaries saw a positive year-on-year increase in the scale of wealth management products, with 12 subsidiaries experiencing growth rates exceeding 10%.

Professionals analyzed that due to the suspension of "manual interest compensation," a large amount of deposit funds flowed into bank wealth management products, coupled with the overall bull market in the bond market in the first half of the year, the net value performance of bank wealth management was quite good. Against this backdrop, the scale of bank wealth management has significantly increased, driving a substantial improvement in the performance of wealth management companies.

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Performance has generally increased, with 7 subsidiaries achieving a net profit growth rate of over 20% year-on-year.

As the semi-annual report disclosure season comes to an end, the performance of bank wealth management subsidiaries in the first half of the year has been revealed. According to the data collated by Enterprise Early Warning, so far, 6 state-owned large banks, 9 joint-stock banks, and 7 city and rural commercial bank wealth management subsidiaries have disclosed their first-half operating data.

In the first half of 2024, the 22 wealth management subsidiaries achieved a combined net profit of 14.7 billion yuan, a 11.61% increase from 13.171 billion yuan in the same period of 2023. Among them, 17 wealth management companies achieved a positive year-on-year increase in net profit, accounting for nearly 80%, indicating a significant improvement in performance.

Among wealth management companies, the profit level of joint-stock bank subsidiaries still ranks at the forefront. In the first half of this year, joint-stock bank subsidiaries swept the top four in net profit, with China Merchants Wealth Management leading the industry with a net profit of 1.447 billion yuan, followed by Xingye Wealth Management with a net profit of 1.341 billion yuan. Ping An Wealth Management and CITIC Wealth Management ranked third and fourth with net profits of 1.192 billion yuan and 1.159 billion yuan, respectively.

Among the state-owned large bank subsidiaries, Agricultural Bank of China Wealth Management and Bank of China Wealth Management have relatively leading net profits, both reaching 1 billion yuan, achieving net profits of 1.12 billion yuan and 1.111 billion yuan in the first half of the year, respectively. ICBC Wealth Management and CCB Wealth Management followed with net profits of 988 million yuan and 917 million yuan. Among city and rural commercial bank wealth management subsidiaries, Hangzhou Bank Wealth Management had the highest net profit in the first half of the year, reaching 528 million yuan, followed by Ningbo Bank Wealth Management and Nanjing Bank Wealth Management, with net profits of 386 million yuan and 322 million yuan, respectively.

In terms of profit growth rate, many wealth management companies achieved significant growth in net profits in the first half of the year, with 7 subsidiaries having a year-on-year growth rate exceeding 20%.

According to the data collated by Enterprise Early Warning, Shanghai Pudong Development Bank Wealth Management, Chongqing Rural Commercial Bank Wealth Management, and Ping An Wealth Management ranked the top three in net profit growth rate in the first half of the year, with year-on-year increases of 136.49%, 81.58%, and 77.91% to 525 million yuan, 138 million yuan, and 1.192 billion yuan, respectively. In addition, the net profit growth rates of Agricultural Bank of China Wealth Management, CITIC Wealth Management, China Post Wealth Management, and Bank of China Wealth Management also exceeded 20%, with increases of 28.59%, 23.30%, 22.21%, and 20.89%, respectively.For the reasons behind the positive performance of wealth management subsidiaries in the first half of the year, Xue Hongyan, Deputy Dean of the Star Chart Financial Research Institute, analyzed that due to the suspension of "manual interest supplementation," a large amount of deposit funds flowed into bank wealth management products. Coupled with the overall bull market in the bond market in the first half of the year, the net value performance of bank wealth management was also good. Against this backdrop, the scale of bank wealth management has increased significantly, driving a substantial improvement in the performance of wealth management companies.

"The market environment in the first half of the year, the migration of deposits, and the bond market conditions have promoted the rapid expansion of the scale of bank wealth management, supplementing the fee income of wealth management companies," said Ai Yawen, a senior analyst at the Rong 360 Digital Technology Research Institute. Wealth management companies have also improved the stability of product returns by optimizing product structure, increasing the issuance of closed-end and hybrid products, and improving product design and risk management, effectively enhancing product attractiveness and return levels. By improving operational efficiency and reducing operational costs, they have further strengthened profitability.

The rebound in the scale of wealth management products has led to an increase of more than 10% for 12 companies compared to the end of last year.

"The significant increase in the scale of wealth management products has brought more management fee income to wealth management companies, which is an important driving force for the growth of net profits, of course, also benefiting from factors such as business innovation and cost control," said Ai Yawen in his analysis.

The main reason for the year-on-year increase in the performance of wealth management companies in the first half of the year is the rebound in the scale of wealth management. According to the "China Banking Wealth Management Market Semi-Annual Report (2024 H1)" released by the Banking Wealth Management Registration and Custody Center, both the number and scale of bank wealth management products increased in the first half of this year.

As of the end of June 2024, there were 239 banking institutions and 31 wealth management companies with existing wealth management products, with a total of 40,000 products, an increase of 0.49% from the beginning of the year, and an increase of 7.99% year-on-year; the existing scale was 28.52 trillion yuan, an increase of 6.43% from the beginning of the year, and an increase of 12.55% year-on-year.

Among them, wealth management companies have the most existing product quantities and amounts, and the increase is more significant, with 21,600 existing products and a scale of 24.33 trillion yuan, an increase of 8.27% from the beginning of the year, and an increase of 17.71% year-on-year, accounting for 85.29% of the entire market.

The growth trend of the asset management scale of wealth management subsidiaries can also be seen from the semi-annual reports of the parent banks. According to the data collated by the Enterprise Early Warning Pass, as of the end of the first half of 2024, the scale of wealth management products managed by 25 bank wealth management subsidiaries was approximately 24.38 trillion yuan, an increase of 1.73 trillion yuan from 22.66 trillion yuan at the end of 2023, an increase of 7.6%. Among them, 23 wealth management companies have increased the scale of wealth management products compared to the end of last year.

Data shows that, as of the end of the first half of the year, among the 25 wealth management companies, the wealth management product scale of China Merchants Bank Wealth Management and Industrial Bank Wealth Management, two joint-stock bank wealth management subsidiaries, both reached more than 2 trillion yuan, at 2.44 trillion yuan and 2.15 trillion yuan, respectively, leading the industry. Followed by CITIC Bank Wealth Management, Bank of China Wealth Management, ICBC Wealth Management, and Agricultural Bank Wealth Management, with wealth management product scales exceeding 1.6 trillion yuan, at 1.92 trillion yuan, 1.8 trillion yuan, 1.75 trillion yuan, and 1.73 trillion yuan, respectively. The wealth management product scale of CCB Wealth Management, Everbright Wealth Management, BOCOM Wealth Management, SPDB Wealth Management, and Ping An Wealth Management also reached more than 1 trillion yuan.

Among the city commercial bank wealth management subsidiaries, Suzhou Bank Wealth Management has the highest scale of wealth management products, with a product balance of 604.5 billion yuan at the end of the first half of the year, followed by Nanjing Bank Wealth Management, Ningbo Bank Wealth Management, and Hangzhou Bank Wealth Management, with wealth management product scales all in the 40 billion yuan range, at 43 billion yuan, 40.49 billion yuan, and 40.235 billion yuan, respectively, maintaining the first echelon of city commercial bank wealth management subsidiaries in terms of scale.Looking at the growth rate of the scale of wealth management products, a total of 12 wealth management subsidiaries have achieved double-digit growth in the balance of wealth management products compared to the end of the previous year. Among them, the balance of wealth management products managed by Evergrowing Wealth Management, China Post Wealth Management, and Huaxia Wealth Management all grew by more than 20% year-on-year, increasing by 29.69%, 23.29%, and 21.10% to 143.174 billion yuan, 957.325 billion yuan, and 716.822 billion yuan, respectively. The scale of wealth management products of 9 wealth management subsidiaries, including BOC Wealth Management, BOCOM Wealth Management, CITIC Wealth Management, Everbright Wealth Management, Nanjing Wealth Management, Guangzhou Wealth Management, Bohai Wealth Management, Shanghai Pudong Development Bank Wealth Management, and Jiangsu Wealth Management, also grew by more than 10% compared to the end of the previous year.

According to an analysis by Everbright Securities, the significant growth in the scale of wealth management in the first half of the year, which was stronger than the same period last year, was mainly boosted by three factors: First, the yield of wealth management products has a comparative advantage over deposits. Coupled with some banks' active control over high-cost retail deposits such as 3-year large-amount certificates of deposit, this has promoted the transformation of some residents' deposits into wealth management; Second, after the cessation of "manual interest supplementation" deposits, some corporate funds have migrated from "quasi-demand" deposits such as agreement and notice deposits to time deposits or off-balance-sheet non-bank products, and the outflow of funds is conducive to the expansion of the scale of corporate wealth management; Third, due to factors such as the aftermath of wealth management redemption, the same period last year had a low base characteristic.

In addition, regarding the reasons for the narrowing or slowing growth of the scale of wealth management products of some leading wealth management companies in the first half of the year, Zhou Yiqin, a senior financial regulatory policy expert, stated that the large management scale has put forward new requirements for the investment research capabilities of wealth management companies. "It's hard for an aircraft carrier to turn around." Due to the excessively large scale, investment managers of super-large wealth management companies need to find suitable investment opportunities in a broader market to maintain appropriate asset allocation, increasing the difficulty of selecting assets. Therefore, the asset yield may decrease marginally due to the lack of high-quality assets. Moreover, once the market changes, wealth management companies with excessively large management scales may find it difficult to respond quickly to market changes, and there may be redundancy in resource allocation.

Sales channels continue to expand, actively laying out thematic wealth management.

It is worth noting that in order to promote the expansion of the scale of wealth management products, the increase in the number of wealth management customers, and the improvement of profitability, wealth management companies have continued to strengthen channel construction in the first half of the year and actively expanded sales channels outside the parent bank.

The semi-annual report of Postal Savings Bank shows that China Post Wealth Management has achieved steady growth in the scale of wealth management across all channels, driven by comprehensive development and refined services. The retail scale of postal savings has increased by 100.309 billion yuan compared to the end of the previous year, setting a new historical high; the scale of retail channels outside the bank has increased by 66.62% compared to the end of the previous year, ranking among the industry leaders; the service model for large institutional wealth management customers has continued to break through, with an existing scale of 130.391 billion yuan.

Hangzhou Wealth Management, relying on a rich network of sales channels, has fully improved the efficiency of each channel around the sales characteristics of the channel end and customer needs, achieving significant growth in the scale of agency sales and the number of agency customers signed, increasing by 23.50% and 30.12% respectively compared to the end of the previous year, and further enhancing brand influence.

In terms of the number of agency sales institutions outside the bank, as of the end of the first half of the year, CITIC Wealth Management has established cooperative relations with 180 agency sales institutions outside the bank, an increase of 41 compared to the end of the previous year, an increase of 29.50%; Xingye Wealth Management has developed more than 510 small and medium-sized bank agency sales cooperation institutions, with a wealth management balance of 195.8 billion yuan in the agency sales channels of small and medium-sized banks, an increase of more than 14 billion yuan compared to the end of the previous year; Jiangsu Wealth Management adheres to the "1+N" channel construction, continues to consolidate the parent bank channel, promotes the deep integration of the parent and subsidiary companies, and actively expands external agency and direct sales channels, with more than 130 external agency channels...

The semi-annual report of the bank wealth management market also disclosed that in the first half of 2024, the wealth management products of 28 companies, in addition to being sold by the parent bank, also opened up agency sales channels for other banks. The number of cooperative agency sales institutions of wealth management companies continues to grow, and in June 2024, 511 institutions in the whole market sold wealth management products issued by wealth management companies, an increase of 20 compared to the beginning of the year.

In addition to expanding sales channels, wealth management companies have also continuously enriched product supply and optimized product functions. New products actively implement the "five major articles", and related thematic wealth management products are frequently updated. Many banks have disclosed specific data in their semi-annual reports.Ping An Wealth Management disclosed that the company has been actively implementing the requirements of the financial "five major articles," and in the first half of the year, it issued technology finance and green finance themed products, including the Steady Selection (Science and Innovation) and Steady Selection (Green Hills). In terms of ESG-themed financial products, Agricultural Bank of China Wealth Management has been actively practicing the concept of green development, continuously launching ESG-themed financial products. In the first half of the year, it issued 20 new ESG-themed financial products, with a total of 59 ESG-themed financial products by the end of June, with a scale of 54.104 billion yuan; China Merchants Bank Wealth Management has issued a cumulative total of 4 ESG-themed products, with a remaining scale of 4.551 billion yuan.

In the vigorous development of inclusive finance, China Post Wealth Management has continued to innovate in inclusive series financial products. In the first half of the year, it issued a cumulative total of 44 inclusive series financial products, raising 31.91 billion yuan, with 287,200 purchasers. Actively assisting in pension finance, as of the end of the first half of the year, CITIC Bank Wealth Management has established 109 "Xinyi" series products around pension investment needs, with a scale of 45.169 billion yuan; China Post Wealth Management's pension fund financial products and pension financial products have a scale of 10.001 billion yuan.