|
Home>News Center>Bizchina>Business | |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Banks team up to sell mutual funds Four Chinese banks yesterday formed a strategic partnership for mutual fund sales, pensions and asset custody services to extend penetration and enhance competitiveness. The four banks - Shenzhen-based China Merchants Bank, Shanghai Pudong Development Bank, Beijing-based CITIC Industrial Bank and China Everbright Bank - are all joint stock banks that have operations nationwide. However, they are still lowly compared to the huge State-owned banks in terms of distribution network on their own. A framework agreement signed yesterday by the four banks in Beijing said they will form a unified mutual fund sales services network. If this proves successful they will work together to develop their wealth management, pensions and insurance assets custody businesses, senior officials at the banks said yesterday. "Such a partnership will save each bank a lot of the cost of marketing and selling funds," said Ma Li, deputy president of Shanghai Pudong Development Bank. More fund management companies should be attracted to these smaller banks as agents for fund sales and custody, and the co-operation will also prepare a smooth distribution channel for when the banks themselves are ready to issue funds. Financial regulators have chosen three domestic banks - the Industrial and Commercial Bank of China, China Construction Bank and Bank of Communications - to launch pilot fund management companies. Li Hao, deputy president of China Merchants Bank, which proposed the union, said the joint stock banks have to expand their co-operation to make up for their network shortage and to become more competitive. Fund sales and custody have become a major source of intermediary business income for banks, which are shifting focus from the traditional lending and savings businesses. Statistics indicate assets put under custody by the four banks together totalled 73 billion yuan (US$8.8 billion) by the end of March. Their combined outlets number 1,500. Paul Thompson, CEO of Everbright Pramerica Fund Management Co Ltd, said yesterday the partnership is a positive step for the banking sector as well as the fund industry. The fund management joint venture will start to issue a monetary market fund in mid-May, which will be the first fund product to be sold by the four united banks. A wider distribution network will broaden the base for finding investors, he said. The fund market is going through "a very challenging time", as the stock market underperforms and fund issuing is down this year compared to last, said Thompson. An expected fast development of pension funds and monetary market funds will drive up market scale. The anticipated participation of banks in mutual fund issuing will help "make the cake bigger", said Thompson. |
|
|
|
|
|||||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||||
