Latest News:  
Beijing   Sunny/Cloudy    13 / 1 ℃  City Forecast

English>>Business

Moody's warns about risky wealth products

By Hu Xiaocen (Shanghai Daily)

09:54, December 11, 2012

THE issue of risky wealth management products sold by banks which turn out problematic and cause investors to lose their entire savings is credit negative for Chinese lenders, Moody's Investors Service said yesterday.

Beijing-based Hua Xia Bank is being investigated by the China Banking Regulatory Commission's Shanghai Office and the police after allegations that a former employee sold such risky wealth management products without permission.

The investigation and investors' anger are credit negative for Chinese banks and highlight the risks of implicit liability in the banks' fast-growing wealth management product business, Moody's said in a report.

Even if the investigation does not find Hua Xia liable, banks in general will take a hit to their reputation that could adversely affect their overall business, Moody's added.

The rating agency warned that "any legal liability assigned to the bank would set a precedent for banks and investors in future similar cases. We see such risks as a recurring credit risk as banks strive to introduce new products to increase non-interest income."

Moody's said the investigation further underscores the risk that banks face from potential fraud and misconduct arising from China's burgeoning wealth management product sector.

We recommend:

'Boeing Dreamliner riddled with errors

HK tops China City Competitiveness Ranking

China's electric rail mileage ranked world's first

10th China Int'l Automobile Exhibition concludes

Harbin-Dalian high-speed railway starts operation

New wave of communication tools

Alibaba's 2012 transaction volume hits 1 trln yuan

China's savings rate world's highest

iPhone 5 launch event held in Seoul, S. Korea

Email|Print|Comments(Editor:梁军、厉振羽)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. China's WZ-10 armed copters in training

  2. PLA recruits to join army units

  3. Unforgettable moments you cannot miss in Dec.

  4. Fantastic undersea world in Indonesia

  5. Cumquat market in S China's Guangxi

  6. Skyscraper Shanghai Tower

  7. 2013's holiday dates cause upset for some

  8. When Weibo meets WeChat

Most Popular

Opinions

  1. Turning point in China's economy growth at hand
  2. Long way for CNOOC after Nexen takeover approval
  3. More translations needed for Chinese literature
  4. Commentary: Western powers should drop bias
  5. Stock market needs regulation, not promotion
  6. BRICS economies are not fading
  7. Debate over gaokao policy heats up
  8. A survey on lunch in Beijing's primary schools
  9. China on course for stable growth: JP Morgan
  10. School needs be responsible for teachers' behaviors

What’s happening in China

Cumquat market in S China's Guangxi

  1. China to protect 1,000 minority villages
  2. Building catches fire in Shanghai's Pudong
  3. Computerized welfare lottery sales hit 100 bln RMB
  4. Foreigners asked to retrace Long March
  5. Online name-calling not equal to public opinion