Recently it was reported that by the end of 2016, the net value of asset custody reached RMB 9442.307 billion, up by 30.89% compared with the beginning of the year and ranked 3rd in the industry; profit from custody was RMB 4.351 billion, ranked second in the industry; custody business led the industry.
According to the latest data from China Banking Association, in 2016, IB witnessed an array of custody business leading the industry: the scale of trust property safekeeping was RMB 2059.574 billion, and scale of asset management custody of securities companies was RMB 2011.644 billion, both ranked first in the industry; the scale of insurance capital custody was RMB 700.337 billion, ranked first among shareholding banks of the same type; the number of custody products was 21457, also ranked first in the industry. Thanks to stable growth of custody business, IB’s commission of all kinds of custody was up to RMB 4.351 billion last year, second only to ICBC.
Faced with financial disintermediation and narrowed interest rate spreads, asset custody businesses have no need for capital, and can help transform commercial bank into green development featuring “low capital consumption and sustainable growth, and can bring stable non-performing capital in operation and remarkable comprehensive profit, thus becoming key businesses of commercial banks.
The statistics from China Banking Association revealed that at the end of 2016, scale of asset custody of commercial banks has exceeded RMB 120 trillion, up by 39.03% compared with the end of 2015; the number of custody products was over 0.158 million. In 2016, the commission of custody exceeded RMB 51 billion, up by 13.8% over 2015.
The rapid growth of custody business accompanies intensive institutional competition. Changes are taking place in the traditional custody layout of commercial banks dominated by five major banks. Shareholding banks represented by IB witness soaring scale of custody, and take half of the top ten seats concerning scale of custody. IB ranks among the top three, better than several major banks in terms of scale of custody.
The head of IB’s Asset Custody Department introduced that IB takes advantage of multiple licenses, comprehensive and group operation, and offers all-round value-added services covering product structure design, investment and financing operation, sales channels as well as consultation and advice that win the faith of clients and facilitate rapid development of IB’s custody business.
Of particular note, intensive competition leads to downward industrial custodian fee rate. As a response to intensive competition, IB started its product structure transformation in 2015, actively explored new source of businesses, and avoided sinking into price war of homogeneous businesses.
In 2016, IB vigorously extended into standard products including public offering fund, developed bank wealth management and custody of assets securitization businesses, actively involved itself into custody of cross-border products such as QDII、QFII、RQDII and RQFII, and ensured growth in scale and stable business revenue. As of the end of 2016, IB has launched another 72 custody public offering funds, and the total has reached 146; scale of custody was RMB 467.833 billion, up by RMB 179.515 billion compared with the beginning of the year; scale of outside bank wealth management products custody was RMB 562.483 billion, up by RMB 253.93 billion compared with the beginning of the year.
IB’s asset custody has covered trust, securities, fund, insurance, private fund and cross-border products, and served over 800 clients. Last year it set up Asset Custody (Qingdao) Center in Qingdao which is responsible for expanding custody of wealth management products nationwide. The steady development of custody business will help accelerate IB's transformation of “light asset and high efficiency”.