Competition in the financial sector has evolved into competition of brands.

Together with the continuous enhanced needs for wealth management, commercial banks bring forward their wealth management products one after another. Many strong powers are formed in the wealth management market; it has become the focus of competition among commercial banks.

Speaking of wealth management, CEB’s Sunshine Wealth Management products are no doubt among the best in the market.

It is known that by the end of November 2005, CEB had realized total sales of RMB 20 billion for its Renminbi wealth management products, and sales of near USD 700 million for its foreign currency wealth management products, the total volume of both items added up to RMB 25 billion. Among it, sales to the private sector alone totaled RMB 21.6 billion.

Compared with the sales volume of RMB 17 billion in 2004, this year’s sales increased by RMB 8 billion, up by nearly 50%. Sunshine Wealth Management continues to be the “bellwether” in the domestic wealth management market.

Sunshine Wealth Management: Account for Half of the Growth

Looking back at the development history of wealth management, CEB was the first bank to venture into the unknown realm. At the beginning of last year, CEB took the lead in launching foreign currency wealth management product – Plan A in the domestic banking industry, which started the prelude of wealth management innovation, and rapidly ignited people’s enthusiasm in wealth management; the demand for wealth management rapidly grew and exceeded product supply. Long lines appeared at the business halls of many banks which used to be quiet and empty; people were anxious to consult, purchase and make business appointments. This unprecedented response to wealth management boosted CEB’s confidence in exploring product innovation, and the Bank fully recognized the unlimited business opportunities hidden in the wealth management market.

Afterwards, CEB successively brought forward the first Renminbi wealth management product – Plan B, the first education-oriented wealth management product – Plan E, and Plan A+, featured by investment in Renminbi and return in US Dollars. The launching of these new products led the wealth management market to one high tide after another. Wealth management became CEB’s new growth point of personal business as well as fee-based business.

Sunshine Wealth Management played an important role in inspiring the development of saving business. Relevant statistics showed that, by the end of November, the balance of CEB’s savings deposit reached RMB 75.076 billion, increased by RMB 20.968 billion over the beginning of the year, and completed 111% of the annual plan. The balance of savings deposit accounted for 17.35% of total, representing an increase of 3.34 percentage points over the beginning of the year; growth in savings balance made up 45.05% of total, accounting for nearly half of the latter. Aside from bringing considerable revenues to its clients, CEB’s wealth management business stimulated the fast development of the personal business and wealth management business.

Product Innovation: Tailor to Clients’ Needs, Seize Market Opportunities

After digging out the first bucket of gold in the wealth management market, CEB firmly determined to further boost its wealth management business, push forward product innovation, and strive for “wealth management bank” and “excellent bank”.CEB has led the way in revolutionizing the domestic wealth management sector by promoting new products onto the wealth management market.

On January 14th, 2005, CEB held a press conference in Beijing, and announced the launching of the first domestic Sunshine Wealth Management Product that focuses on education – Plan E. Plan E included a wide range of wealth management products such as “Golden Scholar Nurturing Plan” in Renminbi, “Overseas Doctorate Study Plan” and “Reassuring Overseas Study Plan” in foreign currencies, as well as a rich selection of financial services such as wealth management seminars, deposit certificate, credit cards, purchase of foreign currencies for going abroad, wealth management plans designed for high-end customers. Plan E is an ideal product for parents who expect academic success from their children.

Due to the great potential of the wealth management market, almost all state-owned banks and joint-stock commercial banks launched wealth management products in less than six months, bringing the competition to a new level.

However, as the competition becomes increasingly fierce in the wealth management market, edge-ball operations frequently occurred in the market; in view of this, the government’s regulatory authorities strengthened the establishment of “game rules” for the wealth management market. In March, the regulatory department released a notice, besides reiterating the requirements that “not blindly pursuing high product returns” and “explicitly risk disclosure”; the notice also explicitly stated that “deposit cannot be a tied product when selling Renminbi wealth management product”. This had an immediate negative impact on the expected rate of return of the Banks’ newly promoted wealth management products. The expected rate of return for one-year-term products dropped to between 2.50% and 2.90%. In addition, the continuous drop of the rate of return for Central Bank’s notes dealt another heavy blow to the return rate of Renminbi wealth management products, causing tremendous pressure to products of this kind. On March 17th, the Central Bank lowered the ratio of excess reserves, which posed another challenge for Renminbi wealth management products. Under tremendous market pressure, domestic Renminbi wealth management products that mainly invest in Central Bank’s notes have entered into a very difficult period, and had sunk into slump.

At that moment, after careful study of the market, CEB timely brought forward Sunshine Wealth Management Plan A+, this for another time broke up the dilemma. Plan A+ makes use of the rules of Quanto: Renminbi is the basic currency used in transactions of the principal; the investors’ returns are linked with underlying assets and derivatives of the international financial market through swap transactions; returns are realized based on the actual performance of basic assets, basic transactions and relevant agreement; when the Plan matures, CEB returns the principal in Renminbi and pays the investment revenue in US Dollars to investors,. CEB guarantees that the investors’ principal suffers no loss. Due to the sluggish investment market and the scarce effective wealth management products in the domestic market, CEB effectively expanded investment channels for its investors, easily realized the dreams of investment in Renminbi and returns in US Dollars. At the same time, CEB brought domestic personal wealth management to a higher stage for competition.

It is known that, in order to improve the clients’ flexibility of purchasing wealth management products, recently, CEB completely upgraded Plan A+, improved the meaning of structural deposit of Renminbi; clients can choose to receive revenues either in US Dollars or Renminbi. The upgraded Plan A+ will keep its competitive advantage in the RMB wealth management market by right of more secure exchange rate protection mechanism, more reasonable interval configuration, and more flexible revenue options.

Development Strategy: brand leading the way

CEB has always come out on top in the fierce wealth management competition; its series of product are among the most popular ones; and the market share is far beyond that of its peers. What is CEB’s secret for success?

The answer lies in the fact that ever since the Bank started its wealth management business, it has always focused on developing its brands.

“We absolutely walk a business path where brand leads the way. Before the comprehensive spread of wealth management business, the consolidated visual identification system of CEB wealth management which bears the business philosophy of ‘accumulating wealth and brightening the future’ are delivered to each outlet and each staff. All of our advertisements focus on the overall brand image of Sunshine Wealth Management; we attach great importance to the expression of healthy wealth management concept rather than pursuing high yield of a specific product – although the return rates of our products are quite competitive”, the leader competent for brand image promotion at CEB told the reporter.

It is known that Sunshine Wealth Management covers both the private and corporate sectors. CEB is striving to highlight the characteristics of both business and products by enhancement of its brand, improving the image of CEB as a Wealth Management Bank and Excellent Bank. The Bank’s corporate business includes “Online One-counter Link”, “Sunshine Wealth Management Insurance”, credit asset transfer and guaranteed discount of commercial bills etc; and the personal business is individualized one-stop services to mid- and high-end customers; includes not only savings deposits, Sunshine credit cards, fee-based business and personal consumption credit, but also featured services including new wealth management products and life-time wealth management planning with better appreciation guarantee through cooperation with the Bank’s peers.

During the past year, CEB successfully launched a series of featured products such as Plan A (foreign currency wealth management), Plan B (Renminbi wealth management), Plan E (education centered wealth management), Plan A+ (investment in Renminbi, returns in US Dollars), and greatly enriched the product-line. Moreover, CEB endeavored to strengthen brand development, unify logos, design and decorate the service place according to the unified CI. CEB has established nationwide unified VIP services, and owns a service network with broad coverage areas such as banking institutions service network, e-banking comprehensive service network, online general services and specialized wealth management services etc, relying on its advanced technology and support of developing new product. In the beginning many clients feel “Want to finance? Go to Everbright!” was only a catching phrase in the advertisement; but now, CEB has truly become part of their life. Sunshine Wealth Management products are designed to satisfy the needs of clients such as family wealth management, start of business and maintenance and increase of asset values. Once clients bring forward customized services, our Sunshine Wealth Management staff is committed to recommend corresponding products that best meet clients’ needs.

The brand development of Sunshine Wealth Management has achieved preliminary success. The image of the brand is significantly improved and spread, the brand asset is continuously accumulated, and brand recognition and reputation are greatly improved. Today, “accumulating wealth and brightening the future” has become the integral concept of Sunshine Wealth Management products. Slogans such as “Need Wealth Management? Go to Everbright!”, “Come to CEB for Good Wealth Management”, “Wealth Management with CEB, Sunshine Services All” have become well known and are widely recognized by people. Meanwhile, the recognition of “CEB endeavors to be the bellwether in the wealth management market” and “Sunshine Wealth Management products set the wealth management trend” are widely spread in the domestic market. CEB has made the first step in establishing the market image of Wealth Management Bank and Excellent Bank.

After two years of careful planning, Sunshine Wealth Management has been gradually recognized by the market; the fundamental shape of Wealth Management Bank and Excellent Bank was formed, which helps attracting clients and expanding business.

Prospect: the Featured “Wealth Management Platform” of CEB

Currently, China’s economy has entered the phase of rapid development; per capital GDP witnesses fast growth; wealth management market for banks faces even greater development potential and is of more importance. According to the statistics released on the website of the People’s Bank of China, by September 2005, total balance of various Renminbi deposits of financial institutions amounted to RMB 29.26 trillion, among which of the balance of savings deposit was RMB 14.23 trillion. A survey conducted by an authoritative professional organization in four cities: Beijing, Tianjin, Shanghai and Guangzhou indicated: 74% of the informants expressed interest in personal wealth management, 41% said that they need such services. Therefore, as China’s banking sector speeds up its paces of opening, domestic commercial banks accelerates product innovation, competes for the development space of wealth management. In view of wealth management products, domestic banks have launched over 20 brands of Renminbi and foreign currency wealth management products in the past couple of years, providing a glimpse of how fierce the competition is in the wealth management market.

As the leader of the wealth management market, CEB has accumulated rich experience and built strong capability in product development. It will be able to maintain its preemptive advantages for many years in the future. CEB will continue adhering to product innovation, develop appropriate products that satisfy clients’ needs of annuity, purchase of properties and cash management etc, and enrich the variety, layers and structure of wealth management products and services. While providing quality wealth management products for clients and satisfying their relevant needs, CEB is also devoted to promoting the healthy and in-depth development of the domestic wealth management market.

In addition, CEB is committed to creating the featured “wealth management platform”. On the one hand, the Bank aims to realize the integration of domestic currency and foreign currency, to allow domestic currency products take over the relevant financial instruments of foreign currency products; on the other hand, on the basis of further categorizing clients, more individualized wealth management products shall be designed to fit the exact needs of clients. Innovation shall be applied to products, channels, techniques and services in accordance with the various needs of clients; general wealth management shall be upgraded to a new level, so that clients with different needs and from different social classes can have maintain or increase their capital value with the wealth management platform of the Bank.