It is not only the need for the transformation of the traditional business of banks, but the practice of overcoming single-channel sales of public funds is also seeking mutual benefits and win-win results with the former. City commercial banks (hereinafter referred to as city commercial banks) are gradually taking the lead in selling domestic public offerings on an agency basis. Two of the top ten institutions in the number of funds have already taken up. The “Daily Economic News” reporter found that channel control is the favor of public offerings, but it has frequently failed due to the market environment, product operation methods and investor liquidity management needs. During the year, 17 public offerings failed to raise funds. , Most of the trusteeship and agency sales agencies are city commercial banks.
The failure of fund issuance does have subjective factors, but the impact on the market environment must also be viewed objectively. Some fund managers recently stated that although A-shares such as food and beverages, pharmaceuticals, and banks have fallen significantly in the near future, they still will not change the fundamentals of China’s economy. After the performance and valuation are dynamically balanced, they will still be a stable investment option.
The Great Wall Fund told Weida that despite the influence of policy factors in this round of decline, the main reason was triggered by market sentiment. “The risks of large gains and overvaluation accumulated in some sectors for several consecutive years have been released. The current overall valuation of A shares is not excessive, and the systemic risk is not large. It is recommended that investors should not panic in the violent market turbulence. Instead, be confident.”
Rich channels to attract public offering negotiations
“According to the continuous expansion of cities to counties and towns, urban commercial banks are sinking more significantly than the four major banks, and they have more financial management tools than rural credit cooperatives. Many asset management committees, including public funds, choose to cooperate with them.” People in the public offering industry said in an interview that the strength of city commercial banks should not be underestimated if only one fund is sold on an agency basis.
Although the issuance of public funds has “cooled down” this year, the industry has never felt the “speed down”. In terms of the number of new issuances, the quarters in the first half of the year still maintained high growth. It is worth noting that, in terms of channel development and audience acquisition, the power of city commercial banks has already emerged, and in terms of the cumulative number of agency sales, some have surpassed the traditional four major banks.
Wind statistics show that as of July 30, 2021, a total of 156 national commercial banks, city commercial banks, rural commercial banks and other institutions have participated in the agency sales of public funds. Among them, Bank of Communications has the largest number of funds sold on an agency basis, at 3860, and there are as many as 112 fund companies on agency. Judging from the top ten rankings of the number of agency funds, city commercial banks have already entered two seats. First, Ping An Bank currently sells 3,520 funds on commission and 98 fund companies on commission; Second, Bank of Ningbo sells 2,502 funds on commission and 89 fund companies on commission.
From the perspective of the overall structure, the fund agency business has begun to show the characteristics of head concentration. The aforementioned public offering circles said that it is not that obtaining the agency qualification for a long time has an advantage, but the construction of distribution channels can attract public offering negotiations.
“We value the control of channels, which is also driven by the shortage of channel sales personnel. At least from the perspective of the effect of sales decline, city commercial banks and even rural credit cooperatives have more social tentacles and avoid the dilemma of a single channel for fund companies. “The aforementioned public fundraiser said that under normal circumstances, it is related to the scale of fund custody. “The larger the scale of custody, the stronger its fund sales ability.”
According to statistics from the Bank of Ningbo’s 2020 annual report, last year there were 590 custody customers, and the balance of custody assets was 2.4 trillion yuan, ranking 17th in the industry. The total fund sales for the year rose to 100.7 billion yuan. Since the beginning of this year, the bank has sold 1,240 funds on commission (all shares are combined), and some old funds have also included them in the latest list of commission agencies.
Difficulties in the release of some products
Although the customer base of fund wealth management is getting younger and the Internet agency sales are strong, the aforementioned people said that the channel incentive fees that banks obtain from fund companies provide protection for the enthusiasm of channel members. However, it is also necessary for the fund to have the same investment strategy and operation methods. Investors have reached an agreement, but now some products are in trouble.
On July 30, Invesco Great Wall Fund announced the announcement that its subsidiary Invesco Taishun would return a one-year issuance failure, stating that by the end of the fundraising period, it failed to meet the filing conditions stipulated in the fund contract and the fund contract could not take effect. This is already the 17th product that failed to raise this year. Prior to this, the League of Nations An Zengxiang, Dongfang Xinyue, and Caitong Fengyi for 12 months had failed on the issue side.
The reporter noticed in the custodians of related funds that there are not a few who choose city commercial banks as fund custodians. Invesco Taishun returns one year under the custody of Bank of Nanjing, Debang Anrui under the custody of Bank of Shanghai, Caitong Fengyi 12 months and Fufu Anda Shuangqing Driver is hosted by Zheshang Bank, etc. It should be pointed out that related products often have lock-in periods in their operation methods, ranging from 3 months to 2 years. The aforementioned public offering community said that due to the needs of liquidity management, investors may not use high volatility and high risk. Product as the first choice. As a custodian bank, it often participates in the agency sales of funds. “If investors disagree with the investment strategy of the previous fund manager, or are not optimistic about the income expectations of the conventional investment portfolio during the post-investment lock-up period, it is difficult to promote. Some equity investment portfolios that take into account the overall blue-chip allocation are even more apparent now. Born at the wrong time.”
She said frankly that market factors and channel factors are the key to product issuance, and it cannot be said that channels such as city commercial banks are declining. “In particular, the development of bank wealth management subsidiaries has accelerated, and the cooperation with public funds will be closer in the future, including wealth management products. For outsourcing investment, some public fund special accounts are also participating in the MOM form of wealth management sub-products, focusing on the’fixed income +’strategy.”
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