Chinese joint-stock commercial bank Zheshang Bank is reportedly planning to create a wholly-owned wealth management subsidiary.
The bank has received approval from the board of directors for its new venture, which is subject to receipt of regulatory approvals.
This new unit will have a registered capital of RMB 2bn (around $304.2m). It will be headquartered in Hangzhou, the capital city of east China’s Zhejiang Province.
Zheshang Bank in its statement said that the launch of the new subsidiary will boost its ability to serve the real economy, create value for investors and fend off risks.
The wealth management subsidiary will focus on the issuance of public and private financing products and offer financial advisory and consulting services.
Other Chinese wealth management subsidiaries
In 2018, CBIRC allowed China wealth management subsidiaries of domestic commercial banks to invest directly in Chinese shares for the first time.
The de-regulation was designed to boost the Chinese stock market, which had plummeted about 22% that year. Allowing private wealth to flow into the stock markets was expected also help stem the liquidity crises.
New laws also overhauled the asset management industry, allowing Chinese state banks to form wealth and asset management subsidiaries.
Last year, China Everbright Bank (CEB) received the green light to set up a wealth management subsidiary.
The bank is said to be one of the first joint stock lenders to get approval for such a move.
Previously, Industrial and Commercial Bank of China, Bank of Communications, Agricultural Bank of China, Construction Bank of China and Bank of China obtained the green light from the China Banking and Insurance Regulatory Commission (CBIRC) to establish wealth management units.