Recently, financial products issued by Chinese banks have frequently been terminated early, with some products being removed from the market after only a month.
On May 30, Minsheng Wealth Management announced the early termination of two products scheduled to end on June 4, namely Minsheng Wealth Management Wealth Bamboo Safety One-Year Closed-End No.1 and Minsheng Wealth Management Wealth Bamboo Safety One-Year Closed-End No.8.
Huaxia Wealth Management also announced the early termination of its cash management financial product No.92 on June 5. The product was established on April 26 and has been operational for just over a month. According to Wind data, the subscription size of Huaxia Wealth Management’s cash management product No.92 was only 410,000 yuan, with a yield of 0.22% since inception.
On May 24, Huaxia Wealth Management’s cash management product No.93 also announced an early termination on May 30. This product, launched on April 9 with a subscription size of 350,000 yuan, has been in operation for less than two months.
China Post Financial also announced on May 11 its intention to terminate the China Post Financial Postal Savings Fortune Hongjin Two-Year Fixed Opening No.5 (Fortune Exclusive) Renminbi financial product early on May 22.
Throughout this year, almost every trading day has seen multiple product announcements of early termination. In 2023, over 2000 products were terminated before schedule.
After the early termination of banking financial products, investors’ final returns are calculated based on the actual number of days the product was held, with no interest accrued between the termination date and the date the funds are credited.
Moreover, many financial products have adjusted their performance benchmarks to align with investors’ expectations.
On May 28, Guangda Wealth Management’s Sunshine Orange Safety Season Seven financial product announced various reductions in Class A, B, D, H, I, and K shares starting from June 6.
Shengjing Bank’s Tianyi Series financial products, Huaxia Wealth Management’s Pure Bond Fixed-Income product with a minimum holding period of 28 days, and Ping An Wealth Management’s New Excellence One-Year Fixed Opening No.5 Fixed Income financial products have all recently adjusted their performance benchmarks to manage investor expectations.
According to some banking experts interviewed by mainland media, in the past two years, the macroeconomic situation and market fluctuations have caused deviations between the performance of many bank financial products and expected returns. Unforeseen events beyond market expectations may also impact the holding returns of financial products, leading to early terminations. In addition, financial institutions may opt to terminate products early due to shrinking scales and continuously miniaturized shares as a cost-saving and product structure adjustment measure.
Another banking expert admitted that such early terminations have become more frequent since the fourth quarter of 2022.
Some netizens believe that the early withdrawal of financial products from the market is due to lack of demand and difficulty in selling.
User “Dalù” commented: “Financial products have a fixed management fee of 0.2%, current returns are just over 2%, not even breaking even, plus a 0.3% sales charge, taking away 25%. Can unreasonable things sell well?”
User “Gè měi gè de” mentioned: “During this period, financial products still feel somewhat risky, but deposit interest rates are relatively low, so it’s advisable to invest cautiously.”
User “Chūnyǔ xīfēng” believes: “The core issue lies in the worrying research capabilities of licensed domestic institutions, compared to investment banks in the US and Europe and fully market-oriented investment institutions. The domestic capabilities can be said to be extremely poor. If this situation of low capabilities, excessive personal motivations, focusing on short-term profits rather than mutual success with customers, is not rectified, this industry is doomed.”
Remember that financial investments always carry risks, and it’s important to conduct thorough research and consider your own financial goals before making any investment decisions.