"The Best Wealth Management Bank": Breaking Through The Asset Management Value Chain And Realizing The Growth Against The Trend

In 2020, even under the influence of the epidemic situation, the per capita disposable income of national residents will be 32189 yuan, a nominal increase of 4.7% over the previous year, and the actual increase will be 2.1% after deducting the price factor. It is worth noting that this number has doubled from 10 years ago. This also means that the residents' demand for wealth allocation is becoming stronger and stronger. As the "purse" of the people of the whole country, it is timely for banks to play an important role in wealth management.

As a large state-owned bank group with a long history and stable operation, Bank of communications has been committed to building "the best wealth management bank". On March 26, the Bank of communications announced its 2020 annual performance, which can also be seen from the efforts made by a big behavior to protect residents' wealth.

Growth of wealth management business against the trend

Let's take a look at the bank's "report card" of wealth management in 2020 from the description of president Liu Jun at the performance report meeting.

From the perspective of channel sales and private banking business in the bank:

1、 At the end of the reporting period, the scale of personal financial assets (AUM) managed by domestic banks reached 3895.566 billion yuan, an increase of 13.04% over the end of the previous year. Wealth management products such as wealth management, fund, insurance and trust accounted for 63.94% of the increment of retail AUM, and the net income of wealth management fees and commissions was 7.634 billion yuan, with a year-on-year increase of 35.18%.

2、 At the end of the reporting period, the Aum balance of domestic banks' standard ward customers was 1789.750 billion yuan, an increase of 16.96% over the end of the previous year, and that of group private banking customers was 833.801 billion yuan, an increase of 25.93% over the end of last year. There were 1.372 million Ward customers of domestic banks, an increase of 15.50% compared with the end of last year, and 61100 group private banking customers, an increase of 21.67% over the end of last year.

From the perspective of the operation of the subsidiaries with asset management license:

1、 Focusing on the strategic goal of "building the most trustworthy trust asset management institution", BOCOM trust focuses on the three strategic pillar businesses of "professional asset management, high-end wealth management and high-quality entrusted service", returning to the origin of trust and serving the real economy. At the end of the reporting period, the company's total assets were 18.701 billion yuan, and the scale of assets under management was 649.325 billion yuan. During the reporting period, the company realized a net profit of 1.218 billion yuan, an increase of 7% year on year.

2、 The Bank of communications fund is driven by high-quality research, and its investment performance is excellent. At the end of the reporting period, the scale of public funds under management was 339.5 billion yuan, an increase of 54.25% over the end of the previous year.

3、 As the "youngest" license in the group's asset management license, BOCOM financial management creates a core bearer of wealth management characteristics, a core supplier of wealth management products, and a comprehensive platform for innovation and development of large asset management business. At the end of the reporting period, the product balance reached 533.797 billion yuan, an increase of 384.37% over the end of the previous year.

4、 Around the strategic goal of "becoming a leading company in growth and profitability in the field of protection insurance", BOCOM life returned to insurance protection. During the reporting period, the scale premium reached 17.225 billion yuan, with a year-on-year increase of 20.10%.

5、 Bocom international is mainly engaged in securities brokerage and margin financing, corporate financing and underwriting, asset management and consulting, investment and loan business. At the end of the reporting period, the company had a total asset of HK $23.36 billion and a net asset of HK $7.78 billion. During the reporting period, the net profit was HK $851 million, up 70% year on year.

6、 Taking advantage of Hong Kong's insurance business license, BOCOM launched the exclusive medical insurance products in Dawan district and participated in the reinsurance business of leasing subsidiary aircraft fleet. At the end of the reporting period, the company had a total asset of HK $769 million and a net asset of HK $555 million, with a net profit of HK $12.8 million, up 20% year on year.

The net profit and assets under management of each subsidiary continued to rise, which is not an easy report card to hand over. From the perspective of the global monetary policy environment, in the past 2020, developed economies adopted unrestricted quantitative easing, zero or negative interest rates, and super large-scale fiscal stimulus to stabilize the economy, which led to the gradual decline of global interest rates and a profound impact on the domestic asset management industry. In addition, bonds and non-standard business "Thunderbolt" constantly, which puts forward higher requirements for asset management institutions' target selection ability and risk control ability. Moreover, the domestic asset management industry has just experienced the baptism of the new regulations on asset management in 2018. It is not too much to say that it is rebirth in Nirvana. In such a complex and chaotic sober, all lines and departments of BOCOM's wealth management can operate steadily, and the scale of assets has risen steadily. It is not easy.

Three strategies to promote synergy among subsidiaries

It may be easy to run a wealth management institution well, but it is easy to know and difficult to do well in a wealth management bank.

The most difficult is the word "coordination". Most of the large domestic banks are full license groups with seven or eight asset management licenses. In addition, there are retail departments and private banking departments. The KPI of each department is different, and there is fierce competition among channels, resources and customers. As the parent bank, what is needed is to coordinate, attract more customers, enrich the "shelf" of products, form the complementary advantages of each subsidiary company, and the achievements will bloom everywhere and feed back to the parent bank.

Zhou Wanfu, vice president of BOCOM, said that in order to improve the ability of wealth management last year, some effective measures were taken:

First, efforts should be made to expand the customer base and enhance the ability to serve wealth management customers.

By means of digital and intelligent upgrading of customer manager's working platform and establishment of expert group, the number of wealth management clients has increased rapidly. This includes double-digit growth in the number of standard ward customers and private banking customers.

Second, strive to provide customers with rich wealth management products.

On the one hand, the group has given full play to its strong advantages in asset management and initially formed the core competitiveness of wealth management products. By the end of last year, the total balance of various asset management products of various asset management related subsidiaries of the group reached 2.51 trillion, providing customers with asset management products such as financial management, trust, public funds, insurance asset management, private equity, etc. Among them, Bank of communications Schroeder fund's active management rate of return on equity investment in recent five years ranked 3 / 80, which has opened up the brand of Bank of communications in the market; Bank of communications financial management has given full play to the advantages of asset allocation and transaction structure, and the product scale of financial management has reached 1.1 trillion, an increase of 16.37% over the previous year; bocom Trust provides diversified self asset allocation and wealth inheritance for institutions and senior customers Service, asset management scale reached 630.6 billion yuan.

"On the other hand, we insist on opening the door to find products, and from the perspective of customers, select high-quality products from the market to meet the needs of customers. The preferred products have achieved good profits for customers last year. The average yield of our preferred equity products is 60.65%, which is much higher than 40.41% of the stock products and 43.68% of the hybrid products in the whole market. The average yield of the preferred fixed income product is 6.35%, which is significantly higher than the 4.09% yield of the whole market bond products. " Zhou Wanfu said.

The third is to improve the ability of customer asset allocation and product portfolio sales, and adhere to the combination of wealth management product sales and providing professional and diversified asset allocation strategies for customers.

Last year, BOCOM realized the accelerated growth of AUM scale under management. From 2018 to 2020, the scale of personal financial assets (AUM) managed by domestic banks will increase by 6.11%, 12.71% and 13.04% respectively. Among them, the proportion of AUM increment of wealth management products such as wealth management, fund, insurance, trust and so on has steadily increased, from 41.57% in 2018 to 63.94% in 2020. By the end of 2020, the balance of public fund products sold on a commission basis amounted to 238.817 billion yuan, an increase of 90.30% over the end of the previous year. The growth and increment of AUM of public funds are in the forefront of the market.

Tu Hong, director of interbank business and chairman of BOCOM financial management, also said frankly that "multiple platforms and full licenses" are the advantages of BOCOM. In addition to 10 subsidiaries, BOCOM financial management and Schroder fund have recently been approved to prepare for the establishment of Schroder Bank of communications financial management. "There are more professionals, complete human resources, products are also relatively complete, and the domestic and overseas channel sales ability is strong."

With the participation of foreign partners, the synergy of "1 + 1 > 2" is more prominent. The joint venture financial management company will give full play to the complementary advantages of shareholders of both sides in customer resources, product design, investment ability, risk management and other aspects, and strive to build a wealth management institution with global competitiveness.

"BOCOM has an international and comprehensive competitive advantage, and can carry out two-way flow of assets and liabilities at home and abroad. For example, we can provide multiple overseas assets to domestic customers, and Schroeder has more" long money "in its overseas management funds, so it can be introduced into the domestic equity market to realize two markets and two kinds of resources." It is represented by Tu macro.

Break through the value chain of asset management

Overseas, there are asset management giants such as UBS group, JP Morgan Chase and BlackRock. In China, although there are many wealth management institutions, there is no large-scale institution with scale, income, stability and characteristics, which is also the goal of each bank.

Zhou Wanfu said that bocom should further promote and create the implementation of the feature of wealth management, closely connect with the strategic layout and requirements of the state to improve people's living standards, expand middle-income groups and improve people's quality of life, and give full play to its advantages accumulated over the years, focusing on the following four aspects:

One is to further improve the management system of wealth management, asset management and investment banking. To give full play to the advantages of scale and strengthen internal coordination, we should break through a service chain and value chain from asset supply to product supply to capital supply.

Second, we should further improve the business model of openness, cooperation and win-win. We will continue to introduce high-quality assets in the whole market, purchase the financial ecology of open wealth management, and cooperate to provide customers with multi-level and diversified wealth management services.

Third, further improve the customer asset allocation service capability based on specialization and investment research. In this regard, we should further integrate the investment and research strength of the whole group, optimize the business model of the head office and branch private banks, and strengthen the personnel allocation and ability training of private banking consultants and wealth management customer managers.

The fourth is to create the characteristics of wealth management in key areas and specific customer groups, focus on pension investment, pension finance and other fields, strengthen the development of pension financial products, and strengthen and optimize science and technology finance, so as to provide financing services for the upgrading of traditional industries, the development of strategic emerging industries and the development of scientific and technological innovation industries. And design exclusive asset management products for medium and high-end customers.

Liu Jun also said: "bocom will deeply cultivate the characteristics of wealth finance, rely on the strategic basis of" expanding domestic demand ", take customers as the center, give full play to the group's comprehensive advantages, and establish a whole chain integrated business model. Improve asset allocation and customer service capabilities. We will accelerate the linkage of the group's product line advantages, create more cash management and equity "hot money" products, adhere to the combination of online and offline, connect mobile banking, "pay the bill", online banking, physical outlets, and provide Omni channel wealth management services. "

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