China’s bank wealth management products (WMP) have shrunk by RMB 1.38 trillion ($200 billion) in the first quarter, reports Caixin. This comes as banks prioritized deposit growth and market volatility weighed on flows.
Bank WMP balances fell to RMB 31.91 trillion at the end of March from the end of last year, according to data from China Wealth (Asset) Management Registry and Custody, though still up 9.5% from a year earlier. The firm is a state-owned industry registry.
Despite signs of a rebound in April, asset allocation for WMPs remains a challenge. Falling short-term bond yields and deposit rate cuts have constrained returns, leaving managers with limited higher-yielding assets, industry insiders say.