This article is from WeChat official account:Prism (ID: lengjing_qqfinance), author: Zhou Chunzi, editor: Yang pudding, the original title: “the middle class in the surge in bank” within the volume “| prism”, the title figure comes from: vision China
The 2020 epidemic is a practical stress test for the banking industry. Therefore, after the recent announcements of financial reports by various banks, whether it is a sharp slowdown in net profit growth or a “double increase” in the amount of non-performing loans and the rate of non-performing loans, they are all within market expectations.
To my surprise, the epidemic has also changed people’s past consumption and savings habits, so that the personal deposits of many banks hit a record high. In addition, the rapid expansion of the middle-class population is reflected in the bank’s annual report. The growth rate of the customer base of gold cards and private banks far exceeds that of regular card users, presenting an “inverted pyramid” shape.
In this context, many banks chanted the slogan of “wealth management” at the performance meeting. This business, which is considered to determine how far the bank can go in the future, looks like the best way to break the situation that banks are looking for in the current internal and external environment where the net interest margin is narrowing and the wealth of residents is increasing.
However, this is not an easy way. As a bank practitioner said to the author of “Prism”, as the online trend of wealth management becomes more and more obvious, what is behind the test is the bank’s asset acquisition capabilities and technological support capabilities. In his view, banks have focused on this field at this point, which is more like an “involution.”
A rare positive growth
The annual report data shows that in 2020, the revenue growth rate of the six major banks and the growth rate of net profit attributable to the parent will have a significant decline. Among them, ICBC’s revenue growth rate dropped from 10.52% in 2019 to 3.22%. In terms of net profit growth, with the exception of Bank of China and Postal Savings Bank of China, the other four major banks have all dropped to a level of a few points. In 2019, this data is generally around four points.
Nevertheless, compared with a 10% drop in net profit for the 2020 interim results, the six major banks achieved positive growth throughout the year. Zhang Qingsong, president of the Agricultural Bank of China, sighed at the performance meeting: Achieving such a profit growth is also commendable.
It is undeniable that during the epidemic, in response to the state’s call to reduce financing interest rates and implement temporary delays in debt service, these unconventional policies have had a substantial impact on bank profits. Taking the Industrial Bank for example, the bank’s new RMB loan interest rate in 2020 is 4.46%, a decrease of 47 BP from the previous year. In the past year, it has handled deferred interest for more than 100,000 customers, and the amount of domestic loans involved reached 1 More than trillion yuan.
In terms of asset quality, the non-performing loans of the six major banks all experienced “double rises” to varying degrees. Among them, the non-performing loans of ICBC increased by 53.8 billion yuan year-on-year to 294 billion yuan, and the non-performing loan ratio of Bank of Communications increased by 20 BP 1.67%, the fastest increase.
Deferred debt service has delayed the exposure of credit risk to a certain extent. However, according to the data monitored by ICBC and China Construction Bank, fewer and fewer companies have applied for extension. ICBC Vice President Wang Jingwu mentioned at the performance meeting that since the third quarter of last year, the bank’s deferred interest loan processing volume has gradually declined, and it has basically returned to the level before the epidemic.
In response to the trend of double rising of bad loans, Liu Jin, the proposed president of the Bank of China, believes that the core business of commercial banks is credit, and operating credit is an operating risk, and there will be non-performing loans. “There will be some fluctuations in the defective rate periodically, sometimes it will be lower, better-looking, sometimes higher, not so good-looking. But as long as it is controlled within a reasonable range, the market does not need to worry too much.”
“Gold Card” customer increaseFaster than ordinary customers
The good performance of the capital market in 2020 combined with the factors of the epidemic has caused the personal deposits of banks to increase substantially, and the scale of the middle class population is rapidly expanding. According to the rough statistics of the author of “Prism”, the six major banks will accumulate new personal deposits in 2020 over 5.4 trillion yuan.
According to the financial report data, four of the six major banks’ personal deposits increased by more than double digits year-on-year. The fastest increase of CCB reached 16.99%, with an increase of 1.48 trillion yuan in personal deposits; in addition, ICBC’s personal deposits The point-in-time balance broke through the 11 trillion yuan mark, and the point-in-time increment hit a record high.
As for the reasons for the rapid growth of personal deposits, Lu Jiajin, vice president of China Construction Bank mentioned at the performance meeting that last year’s monetary policy and financial market environment were conducive to the increase in deposits, which is reflected in the rapid growth of the total amount of money in the society. The broad money M2 increased by 10.1% throughout the year, 1.4% more than the previous year, and it also brought more funds for the development of deposit business.
In terms of customer growth, the growth rate of mid-to-high-end customers was higher than that of basic customers, which became a highlight of the bank’s performance last year. From the data point of view, the epidemic clearly has a greater impact on ordinary bank customers.
Take the “king of retail” as an example, the number of retail customers of China Merchants Bank will reach 158 million in 2020, an increase of 9.72% from the end of the previous year. Among them, customers of Golden Sunflower and above (assets above 500,000 yuan) reached 3.1 million, an increase of 17.15% year-on-year; private banking customers(assets above 10 million yuan) nearly 100,000 households, a year-on-year increase of 22.41%.
In response to the “inverted pyramid” model where the growth of private banking customers is the fastest, the growth of Golden Sunflower and above customers is the middle, and the growth of ordinary customers is the slowest, Wang Jianzhong, vice president of China Merchants Bank, explained at the performance meeting that there is an epidemic on the one hand.The impact of the situation on customer acquisition, and China Merchants Bank’s intentional strategic adjustments to credit cards, resulted in a relatively slow growth rate for ordinary customers.
The rapid growth of customers of Golden Sunflower and above is partly due to two factors. Wang Jianzhong said that on the one hand, it is the impact of the epidemic. After the epidemic, consumption has been weak, the people spend less money, and financial assets have increased accordingly; on the other hand, the development of the capital market has also boosted the increase in the customer base with gold cards and above.
Not only China Merchants Bank, but also the Bank of China mentioned in its financial report that the number of high-end customers and the growth rate of financial assets have reached the best level in the past three years. Zheng Guoyu, Vice President of the Bank of China, introduced at the performance meeting that in 2020, the bank’s mid-to-high-end customers will grow faster than basic customers, and the growth of private banking customers and financial assets will both exceed 15%, and asset-light wealth management income will grow rapidly 42 %.
In addition to the impact of the epidemic, in recent years, with the cooling of the property market in the first-tier and many provincial capital cities, the so-called “best quality asset” halo of real estate has ceased, causing a large amount of funds to return to the financial system such as banks. One of the reasons for the surge in demand for financial management of banks. In a recent public forum, Xun Yugen, deputy director of the Haitong Securities Research Institute, mentioned: “If the wealth gap between myself and my relatives and friends in the past 20 years depends on the number of houses bought in Beijing, then in the next 10 years, 20 years The annual wealth gap depends on how many equity assets you have allocated.”
Wealth management is heavily pressured on
A recently released “White Paper on Online Wealth Management Crowd in 2020” by China Merchants Bank shows that the average investable assets of online wealth management crowd is 670,000 yuan, showing a trend of diversification to second and third-tier cities in terms of regional distribution, and non-first-tier cities The proportion of the population is increasing.
Miao Jianmin, chairman of China Merchants Bank, mentioned at the performance meeting that my country has the largest middle-income class with the largest population, and the wealth of households is the second in the world, but our country’s securitization rate and the proportion of wealth managed by financial institutions to GDP are comparable to those of the United States. Compared with this, there is still a big gap, so wealth management is still in the stage of explosive development. For this reason, China Merchants Bank will make the big wealth management its main business line in the next five years.
“Creating the concept of a wealth bank as soon as possible” is also an important topic at the Industrial Bank performance meeting. Tao Yiping, President of Industrial Bank, mentioned that the scale of off-balance sheet asset management of Industrial Bank in the next five years should catch up with the scale of on-balance sheet assets. By 2025, the contribution of Xingyin’s wealth management to the bank’s profits will not be less than 15%, and strive to reach 18%. .
“At present, every bank, it can be said that many banks are basically paying attention to the building of the wealth system. As a large state-owned bank, we are in wealth managementWhat are the characteristics of the system? Xu Xueming, deputy governor of Postal Savings Bank of China, said in response to questions and answers that PSBC will focus on customers in third- and fourth-tier cities and county areas. Family farms, farmer cooperatives, small and micro enterprises, private enterprises, young people in small towns returning to their hometowns to start businesses, etc. They will all be potential wealth customers of the Postal Savings Bank of China. In his view, with the expansion of middle-income groups in counties, and riding on the east wind of the rural revitalization strategy, the rural market will inevitably become a blue ocean in the future.
Zeng Gang, deputy director of the National Finance and Development Laboratory, analyzed to the author of “Prism” that wealth management is actually a concept of off-balance sheet business or intermediate business, and the marketization of interest rates has pushed the asset-side loan interest rate downward since last year. Against this background, banks are currently facing the big challenge of narrowing the net interest margin, which means that banks need to find non-interest income to deal with. From the perspective of the international banking industry, the main source of non-interest income is wealth management.
In addition, the development of wealth management business can effectively expand the source of bank income. It is an off-balance sheet asset-light business, which has relatively low capital loss, and its net capital return rate is better than that of the on-balance sheet business, which can improve the bank’s Profitability and valuation level.
Zeng Gang mentioned that under the new regulations on asset management, the entire wealth management industry has been in a process of transformation in recent years. After a short-term scale contraction, the scale of the wealth management industry has re-entered from 2019. The upward channel, especially the growth rate of the mutual fund industry is very fast. “In the long run, we believe that there is still room for continued upward growth in wealth management.”
In fact, banks have already begun to taste the sweetness of wealth management. Financial report data shows that due to the bottoming out of the capital market and the blowout of customer fund allocation needs, China Merchants Bank will achieve 610.7 billion yuan in agent non-monetary public fund sales in 2020, an increase of 177.88% year-on-year; Bank of Communications will achieve 7.634 billion yuan in net income from wealth management fees and commissions , A year-on-year increase of 35.18%, and both revenue and growth rate hit a three-year high.
Product creation ability
Although all banks have shown their determination and courage to dig deeper into the field of wealth management, there is a long way to go. With the trend of online wealth management, this also tests the online operating capabilities of every bank.
Tian Huiyu, President of China Merchants Bank, said frankly that from the perspective of the entire value cycle of wealth management, compared with market-oriented asset management institutions, the bank’s asset organization and product creation capabilities are still difficult and painful. Although China Merchants Bank is making a layout, these two items are still weak compared to the advantages and capabilities of channels; in addition, asset organization, product creation, product configuration, and cooperation based on large wealth managementRisk management capabilities such as partner selection, investor education, and post-investment management are also one of the difficulties and pain points compared to the traditional credit risk management of banks.
Zeng Gang also mentioned to the author that banks need to work on two levels to do a good job in wealth management. One is that on the client side, it is necessary to carry out more accurate portraits and stratification of customers, based on which different service plans and various products that match them are provided; on the product side, the first step in completing the transformation of net worth After the development, in the face of the different needs of long-tail customers and high-end customers, how to further improve the product system? This is the next step for bank financial management.
In his opinion, the fixed income and cash products of bank wealth management are relatively mature and have their advantages, but when transitioning to some investment and private equity products required by high-net-worth customers, banks are not there. There must be advantages, so banks need to improve the ability to invest and create products in this area.
His suggestion is that banks need to strengthen cooperation with other asset management institutions or wealth management industry institutions, to exchange products with or without products, and to coordinate to serve customer needs.
This is also a strategy currently being pursued by many banks. For example, China Merchants Bank introduced the products of five wealth management subsidiaries including CCB Wealth Management and Bank of Communications Wealth Management. The relevant person in charge of the retail business of China Merchants Bank Beijing Branch told the author that on the one hand, this is facing the pressure of retiring old products to the net value of the transformation, and relying solely on a wealth management subsidiary to undertake it, which is not rich enough for customers; Different wealth management subsidiaries have their own resource endowment advantages, and they can choose some of their more comparatively advantageous investment categories as a supplementary choice for online customers of China Merchants Bank.
Zhang Xuewen, deputy governor of Postal Savings Bank of China, also introduced that while selling its own products, the bank will increase cooperation with insurance, funds, securities, trust and other industry institutions, introduce high-quality products, and further Enhance the room for the appreciation of customer assets.
It is worth mentioning that in terms of customer stratification, the customer group business model based on asset stratification has been quietly changing for a long time.
The relevant person in charge of the private banking business of China Merchants Bank Beijing Branch told the author that with the continuous increase of the middle-class population in recent years, the material and spiritual needs of the Chinese people have become more abundant, and many subdivided groups with some common needs have gradually appeared. . For example, whether it is a customer with assets of 500,000 or 5 million, they all have their children’s education needs. Therefore, on the basis of the stratified management of customers’ assets, they further explored the classification of customer groups. In the future, customer group management will become more and more detailed.
article from the micro-channel public number: Prism (ID: lengjing_qqfinance) , Author: Zhouchun Zi