Regulator tells banks to cut yields on wealth management products, sources say

The China Banking Regulatory Commission has told domestic banks to lower yield rates for the wealth management products they offer, Reuters reported, citing five unnamed sources. Suppression of returns from the popular investment products – marketed by banks but often backed by risky third-party assets – could reduce their appeal and push retail investors toward other sectors. The move may come as a relief for banks that are having trouble delivering on high-yield products created in previous, more profitable years. One source at a commercial bank’s wealth management division welcomed the intervention, saying that the industry could now afford to cut returns without hurting its competitive position.