The new asset management regulation will not have much impact on Industrial and Commercial Bank of China Limited, as China's largest commercial lender by assets has made preparations, the president of the bank said Tuesday.
It is expected China's central bank and financial regulators will soon formally launch guidelines to tighten regulations on the asset management business of financial institutions.
Gu Shu, president of ICBC, took a positive attitude toward the regulatory tightening.
"To develop asset management business well … there should be regulations and standardized development," he said at a news conference announcing annual results of the bank. "In terms of products, we are designing net worth wealth management products, which are in line with regulatory requirements. In terms of investment, we are doing research on transforming non-standard assets investment into standard assets investment, and we are seeking more standard assets investment products. In terms of risk control, according to the requirements of the new regulation, we are simplifying the product system and reducing embedment to increase penetration of the products."
With the above mentioned preparations, Gu and his colleagues are fully confident that after issuance of the new regulation, the asset management business of ICBC will develop in a sustainable and more standardized way.
At the same time, as asset management becomes growingly internationalized, the bank has also taken actions to satisfy client demands.
Last year, ICBC established a specialized company in Hong Kong for its internationalized asset management business. Only one year after it started, assets under management of the company have reached over HK0 billion (.74 billion).
"We believe not only that the business scale of the company will increase in the next few years, the quality of business will also improve and the risks will be fairly controlled," Gu said.
As of the end of 2017, the balance of ICBC's wealth management products stood at 3 trillion yuan, up 11.4 percent from the previous year. The bank ranked first among peers in terms of stock and increase of wealth management products, he added.
According to a report issued by the China Banking Association, the volume of asset management business in China amounted to 116.18 trillion yuan at the end of 2016. Twenty-five percent of the total was banks' wealth management business, with a volume of 29.05 trillion yuan.