China wealth product sales more than double in 2011

BEIJING, Jan 4 (Reuters) Sales of wealth management products by
Chinese banks more than doubled last year to an estimated 15.5 trillion
yuan ($2.46 trillion), the official Financial News reported on
Wednesday.
Chinese banks sold an accumulated 7.05 trillion yuan in wealth products in 2010, the newspaper said.
The
average annualised return on wealth management products was 4.14
percent in the first nine months of last year, higher than the oneyear
bank deposit rate of 3.5 percent, the newspaper said.
The yield of 16 wealth products exceeded 10 percent and that of 3,307 products was higher than 5 percent, it said.
Chinese
banks have been trying to attract deposits by rolling out a flurry of
highyielding wealth management products, which are open to market
competition.
Meanwhile, real returns on bank deposits are
negative, hurting savers faced with annual inflation stubbornly higher
than the oneyear deposit rate.
Beijing controls China's interest rate market by setting a ceiling on deposit rates and a floor on lending rates.
This
protects banks from competition and ensures they have a decent interest
rate margin, which is around 300 basis points. ($1 = 6.2940 Chinese
yuan)