As related, ICBC's balance of assets under management reached RMB 609.4 billion at the end of November 2010. ICBC tops the domestic league table and remains as the largest asset management bank in the country. The robust growth of the asset management business not only boosts the Bank's intermediary business earnings, but also brings good return to the customers. Just in 2010, ICBC paid RMB 11.8 billion in investment return to customers.
The strong momentum of ICBC's asset management business underscores the value of ICBC focus on innovation to drive the business, said the business director Chen Xiaoyan of ICBC Asset Management Department. In terms of product categories, new offerings in 2010 having strong impact on the market are "Win Every Step" (a fixed-income product with interest calculated in segments), Sun Private Placement (a portfolio securities investment product) and "Ruyi gold" (a combined wealth management product).
The eight product lines- "T+0" ultra-short, fixed-income, stock yield right, commodity investment, FOF, PE, special investment, value-added wealth management products, offer a variety of choices for the market and customers.
Last year, ICBC introduced more innovation mechanisms for asset management business via which approval and management on wealth management products can be streamlined. Clear procedures, clear job responsibilities have been defined in front-office's marketing, middle-office's investment management and back office's clearing. New procedures support business development and risk control under a new operation mode which enables coordinated business activities while risks are separated. In this regard, ICBC stays ahead of the peers in compliance management.
Meanwhile, ICBC invited several international marketing experts to set up professional team in market analysis and product innovation, focusing on the launch of quantitative investment products to emerging markets, FX market. They are a strong force to drive ICBC's product innovation.
Chen Xiaoyan said, ICBC places asset management as a strategic business to drive ICBC's business re-orientation and sustainable development. Asset management services can be a bridge or link to bring together the customer and capital market and drive the innovation in wealth management market. The service can also improve the level of customer services, help customers create good investment return.
From a bank's perspective, asset management business is an important source of intermediary business revenue for commercial banks since banks only act as advisor on wealth management investment, trustee and invest-on-behalf, and collect commission and banking fees. Wealth management products for customers are off-balance sheet records.
Investment assets of non-capital guaranteed, floating-income wealth management products are not counted as a bank's risk assets, no capital of the bank is involved. They are important supports for a commercial bank to change its business structure, achieve optimal use of capital, withstand cyclic risk and enhance stable operation.
Besides, asset management business can feed a leap forward to related business such as asset custody, investment banking or savings deposit. It demonstrates the enormous potential of an emerging business in being a significant driver of integrated business performance in a bank.
Many international investment banking firms announced reports that China is the world's second largest country in terms of personal wealth and total assets, Chen Xiaoyan said. The demand for asset management service is huge, allowing commercial banks to leverage on its large number of customers, business resources accumulated through offering traditional services and the competitive advantages to launch investment products.
At present, ICBC maintains a balance in wealth management business at RMB 600 billion all year round. The result puts ICBC into the top ranking in the country but still a large gap when compared to international firms. Today, asset management business in Chinese commercial banks is still in its infancy.
There is much room for growth. The market demand shows the robust need of wealth management products from customers. In 2011, banks are expected to have fast growth in this area. To ICBC, asset management business will be an important profitability growth point in the way ahead.
