Another bank joined in

2022-05-28 0 By

The cross-border Financial Link pilot banks are expanding.On January 27, the list of the second batch of banks in the Guangdong-Hong Kong-Macao Greater Bay area pilot cross-border banking link was announced.Fourteen banks, including Everbright Bank Guangzhou Branch, Overseas Chinese Wing Hang Bank (China) Zhuhai Branch, Dah Sing Bank (China) Guangzhou Branch, Bank of Shanghai Shenzhen Branch, Xiamen International Bank Zhuhai Branch and Chong Hing Bank, were shortlisted.So far, the number of pilot banks in the mainland has increased to 27 and that in Hong Kong to 24.”The second batch of pilot banks are all urban and foreign banks.It is worth mentioning that The Bank of Shanghai and Xiamen International Bank have become the first urban banks to be selected as the pilot banks. This is not only an increase in the number of banks, but also an expansion of the types of banks. The two urban banks will give full play to their advantages of small size and relatively flexible business in the future.”Zeng Shengjun, a senior researcher at the Bank of China’s Greater Bay Area Financial Research Institute, told the Financial Times.Since October 2021, when the first business of cross-border Financial Link was launched, the popularity of cross-border financial Link has remained high, and the first report card can be described as brilliant.According to data released by the Guangzhou Branch of the People’s Bank of China, by the end of 2021, 22,000 investors had participated in the cross-border Wealth Management Connect business, handling 5,855 fund transfers worth 486 million yuan.Through sorting out, the reporter found that the operation of “Cross-border financial link” has shown some characteristics worthy of attention. “Northbound” and “southbound” have initially shown differences in the number of investors and the amount of remittance, but in terms of product purchase preference, the trend is similar.Experts surveyed believe that with the expansion of pilot banks, the transaction scale of cross-border wealth management link is expected to continue to expand.And the newly shortlisted banking institutions have also said that they are ready for the relevant work.”At present, our bank has established the business system, institutional system, product reserve, investor rights and interests protection mechanism and other business foundations for cross-border financial link, and launched cross-border financial Link theme cards for cross-border financial Link customers to provide cross-border rights and interests shared between institutions in the three places.”An official of Xiamen International Bank’s Zhuhai Branch told the Financial Times that the bank will launch the “cross-border wealth management Link” service in 10 branches under its jurisdiction, in coordination with the launch of the head office of Xiamen International Bank to select commission products and accurately meet the comprehensive financial needs of market players.Bank of Shanghai said that in terms of product layout, the bank will focus on the selection of “northbound” investment products, based on the research on the risk characteristics of customers in the two places, to build an attractive product supply pool, covering the commission to sell public funds and commission to sell financial products and other investment categories;In terms of transaction experience, the bank will further improve the transaction process and rely on online banking and other digital channels to provide customers with a more high-speed and convenient cross-border investment “journey”.In fact, the two banks as the first shortlisted city firms, received special attention.”The expansion of the types of pilot banks not only means more banks will participate, but also means that the wealth management service system in the Guangdong-Hong Kong-Macao Greater Bay Area will be more complete and complete.”Zeng Shengjun said.It is worth mentioning that the two shortlisted urban firms have one thing in common, that is, they all have an early establishment in Guangdong, Hong Kong and Macao.It is understood that the second batch of shortlisted Hong Kong Jiyou Bank and the first batch of shortlisted Macao International Bank are affiliated institutions of Xiamen International Bank. In recent years, Xiamen International Bank has set up legal institutions in Guangdong, Hong Kong and Macao, giving full play to the advantages of linkage mechanism, and has accumulated rich experience in financial services in the three places.The Bank of Shanghai is also one of the early urban firms in the Greater Bay Area.Thanks to Shanghai and Hong Kong and Taiwan, Hong Kong and Shanghai bank, Hong Kong, Taiwan, Shanghai commercial savings bank Shanghai commercial bank in 22 years platform building and business cooperation, three Banks focus on large bay area economy development, the cross-border business, syndicated loans, financial science and technology, etc with fruitful results, for “cross-border finance expert” business to lay a solid foundation.By the end of 2021, cross-border financial services have not only achieved outstanding results in terms of total volume, but also can be divided into “northbound” and “southbound”, reflecting some characteristics.According to the person in charge of relevant business of Guangzhou Branch of People’s Bank of China, by the end of 2021, there had been 3,802 transactions of “northbound communication” with the amount of 196 million yuan;”Southbound” business 2053 cases, the amount of 290 million yuan;The northbound link has purchased 160 million yuan of domestic investment products, while the southbound link has purchased 120 million yuan of Hong Kong and Macao investment products.This shows that, on the one hand, in terms of the number of transfers and the balance of market value of investment products held, the northbound connections between Hong Kong and Macao are higher than the southbound connections between mainland China;On the other hand, from the remittance amount, “southbound” is higher than “northbound”.”The main reason for the difference is the different investment needs and conditions of investors from the mainland and Hong Kong and Macao.”Wang Shaohui, a senior researcher at the Bank of China’s Hainan Financial Research Institute, told the Financial Times.To be specific, “Southbound Connect” requires qFII to have a monthly balance of at least 1 million yuan of family net assets or at least 2 million yuan of family financial assets in the last 3 months. Therefore, “Southbound Connect” investors are mostly relatively wealthy people, and the amount of remittance is more than that of “Northbound Connect”.However, due to the relatively low interest rate of deposit products in Hong Kong and Macao at present, and the fact that it still takes a long time for mainland investors to get familiar with Hong Kong funds and other complex investment products, the total market value of investment products held is lower than that of “Northbound Connect”.In addition, it is worth mentioning that the “northbound” and “southbound” investors have similar purchasing preferences and trends for products.In terms of product categories, “northbound” and “southbound” investors tend to buy stable products in 2021.The market value balance of financial products purchased by “Northbound” and deposit products purchased by “southbound” account for 80.75% and 89.48% of the total market value balance of investment products held by north and south respectively.According to Wang shaohui, “Northbound” financial products with low risks and steady returns meet the needs of Investors in Hong Kong and Macao for asset preservation and appreciation, while “Southbound” deposit products with simple structure have to some extent become the basic products for mainland investors to allocate cross-border assets.The existence of “two-way demand” enables the business of “Cross-border Financial Link” to continue to grow steadily.Two-way pilot banks usher in capacity expansion for the market prospect opened a greater space.Oliver Wyman’s research report shows that nearly 70% of mainland investors surveyed in the Guangdong-Hong Kong-Macao Greater Bay Area prefer to buy cross-border fund investment products. Some industry insiders predict that the scale of cross-border wealth connect fund products will show good growth in the future.Wang Ke, director and CEO of Overseas Chinese Wing Hang Bank (China), said that the bank’s entry into the “Northbound” business will find new business breakthroughs while providing clients with asset allocation.It is understood that the bank has prepared dozens of fund products, which will be sold in February.”Next, the banks selected for the pilot program should do a good job in the layout of cross-border financial centers and special branches, and deploy professional cross-border financial managers, product managers and account managers to seize business opportunities.”Zeng Shengjun think that pilot Banks need to strengthen the product innovation and market analysis, combined with the early stage of the Shanghai port in shenzhen, experience, mutual confirmation of funds, etc., financial services, design and development for “cross-border finance expert” customers more wealth management products can meet the demand of investors, covering different assets and market fund, bond, RMB a variety of foreign service.In an interview, Juan Wang, audit director of PWC China, said that currently, the products tested by the “cross-border Wealth Management Link” in the short term are mainly deposits, as well as wealth management products such as low-risk and uncomplex bonds and locally approved funds. Structured products and derivatives will not be included in the eligible investment products in the short term.Source: Financial Times Editor: Zhao Fang Executive Producer: Kong Demei Operation: Haixi Banking insurance Association Submission: All works reproduced on this website have been attributed, and do not represent the personal views of the site and are responsible for their authenticity.Please feel free to contact us for content, copyright and other issues.