Ping An Bank received regulatory approval to launch a wealth management unit, making it the latest major lender to open such a subsidiary in China’s increasingly competitive market for fund advisory and private banking services.
Ping An Bank joins other recent entrants to China’s growing wealth management industry, following similar launches by subsidiaries of Bank of Nanjing and Bank of Jiangsu on Tuesday and Wednesday, respectively.
Ping An Wealth Management said it registered CNY 5 billion ($723 million) in capital it received from its parent bank with the regulator. Bank of Jiangsu’s new Suyin Wealth Management reported CNY 2 billion ($289 million) in initial capital, as did Bank of Nanjing’s Nanyin Financial Management.
Earlier in August, municipal lender Shanghai Pudong Development Bank reportedly launched a larger wealth management arm with registered capital of CNY 10 billion ($1.4 billion), touching off a flurry of similar moves.
Chinese wealth management units have been opening at an accelerating pace following new asset management rules the government rolled out in 2018. At the time, Chinese regulators wanted to cut down on potentially dangerous “shadow banking” activities and get the country’s rising debt-to-GDP ratio under control.
In a bid to reduce the traffic in unregulated wealth and asset management products which threatened the country’s financial stability, the new regulation encouraged banks to form independently registered asset management firms.
Chinese regulators have since taken measures to spur the country’s wealth management business. In June, authorities unveiled Wealth Management Connect, a government-led effort to facilitate cross-border purchases of wealth management products between Hong Kong, Macau and mainland China.
With the openings of the Ping An, Nanjing and Jiangsu subsidiaries, 17 Chinese banks will have launched units dedicated to wealth management and private banking. These include Industrial & Commercial Bank of China, Agricultural Bank of China and China Merchants Bank.