Banks approved to set up asset management units

The China Banking and Insurance Regulatory Commission gave the green light to China Construction Bank Corp and Bank of China Ltd on Wednesday regarding their applications for the establishment of a wholly-owned asset management subsidiary.

Many other commercial banks are also stepping up efforts to apply for such a kind of subsidiary, said the banking and insurance regulator in an announcement posted on its website on Thursday.

The regulator issued administrative measures for asset management subsidiaries of commercial banks on Dec 2 to guide wealth management funds to invest in financial markets in a legal and standardized way, with the aim of supporting the real economy, the part of the economy that produces goods and services.

All of the four largest State-owned commercial banks announced their decision to establish a wholly-owned asset management subsidiary in November. Among them, the Industrial and Commercial Bank of China ranked first in terms of the planned registered capital for the subsidiary, which is up to 16 billion yuan ($2.32 billion).

Similar moves were taken by many other listed commercial banks, including China Merchants Bank Co Ltd, China Everbright Bank Co Ltd and Shanghai Pudong Development Bank Co Ltd.