Cathay Pacific Haitong: Financial management surpasses the 30 trillion mark and subsequent revenue contributions are expected to be positive, stable, and predictable

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that the scale of financial management has broken through the 30 trillion mark, accounting for 18.8% of the large asset management market, and has accelerated its entry into a standardized development channel. At the end of 25Q3, the total number of wealth management products in the market was 43,900, up 10% year on year; the survival scale was 32.13 trillion yuan, up 9.4% year on year, up 2.18 trillion yuan from the beginning of the year. Most banks that set up financial management companies in 2025 have completed the adjustment period, and subsequent financial management revenue contributions are expected to be positive, stable, and predictable. If equity market conditions are supported, income from floating management fees for financial management may also enhance the upward flexibility of performance.

Cathay Pacific Haitong's main views are as follows:

Financial management accounts for over 90%, and its dominant position is becoming more and more stable

At the end of 25Q3, the management scale of financial management companies reached 29.28 trillion yuan, accounting for an increase of 3.3 pct to 91.1% compared to the beginning of the year; 14 financial management companies exceeded trillion dollars, and CMB, ICBC, and CNBC ranked in the top four in terms of financial management scale. Financial license qualifications will be tightened after 2023, and institutional development paths will be divided. Some banks rely on a large stock base (such as Shanghai and agricultural), regional balance under localized demand (such as Chengdu, Qilu, Changsha, etc.), or are expected to take the last train when licenses are issued. The China Banking and Insurance Asset Management Association was recently renamed and included financial management companies in the scope of self-regulatory management and services.

Wealth management weight growth has been slow, but risk appetite may have increased marginally in 25Q3

Overall, the share of wealth management investment bonds continues to decline, and the share of highly liquid assets and public funds is rising. Looking at the top ten assets in financial management positions (Puyi data, the total assets involved account for about 1/3 of total wealth management investment assets): 1) Wealth management equity investments became preferred stocks. The scale of stock investment was basically the same year on year in 2024-2025, but structurally, incremental changes in 2024 were concentrated in bank stocks, and investment in brokerage stocks and non-financial institutions increased in 2025. 2) Public investment is mainly debt-based, with the commodity base accounting for more than 90%. The share of equity and hybrid funds showed a downward trend in 23Q4-25Q2, but stopped falling and rebounded in 25Q3, especially equity funds.

Most banks that established financial management companies in 2025 have completed the adjustment period, and subsequent financial revenue contributions are expected to be positive, stable, and predictable

Bank wealth management revenue has shrunk sharply in the past two to three years, falling 43.2% year on year in 2023. With the exception of the Bank of Qingdao, where the decline was not equal to [-77%, -10%]; in 2024, the overall decline in wealth management revenue narrowed to 2.7%, and the year-on-year growth rate of each company was widely distributed [-60% ,48%]; most banks already had positive double-digit year-on-year increases in 2025H1. In the future, as negative factors weaken and investments become more mature, wealth management income is expected to increase steadily:

1) The transition period for the new asset management regulations is over, and the resolution of the inventory problem is nearing its end. After the implementation of the new asset management regulations, some of the existing non-standard assets needed to be transferred back to the statement and made corresponding provisions due to difficulties in meeting the requirements due to the shelf life, valuation method, or investment structure. At the same time, risk reserves were also required after the establishment of financial management subsidiaries, which offset financial management income to a certain extent.

2) Wealth management rates are already at a lower level than bond funds, and there is limited room for future decline. In the context of fee cuts and concessions, rates for various asset management products have generally declined, and the average fixed management rate for wealth management products has also been reduced from 0.21% in January 2023 to the current 0.16%. Starting in 24Q4, banks have also implemented “zero rate” promotions for some products. Compared with bond funds, the median management rate, sales rate, and escrow rate are 0.3%, 0.15%, and 0.2%, respectively. Currently, the weighted average fixed management rate, sales rate, and escrow rate for wealth management products is only 0.16%, 0.18%, and 0.02%.

3) As the equity market continues, income from floating management fees for financial management may enhance the upward flexibility of performance. Some bank wealth management products have variable management rate clauses, mostly mixed, and a 20-35% contingent management fee is charged for excess returns.

Risk warning: 1) Financial data comes from a third-party platform. The statistics are incomplete, and the conclusions may be biased; 2) Fluctuations in the bond and capital markets or the impact on financial management scale and revenue growth falls short of expectations