The first half of 2025 has been a rollercoaster for China’s wealth management industry. After a dip in the first quarter, the market began a steady recovery, reaching a total scale of RMB 30.67 trillion by the end of June—a 2.38% increase from the start of the year. This resurgence coincides with a rebound in equity markets, where the Shanghai Composite Index repeatedly broke previous highs, closing at 3812.51 points. More strikingly, July financial data from the People’s Bank of China revealed a record monthly increase of RMB 2.14 trillion in deposits at non-bank financial institutions—the highest since records began in 2015—while household deposits fell by RMB 1.11 trillion. Against this backdrop, performance among wealth management firms has been mixed, with some seeing nearly fivefold growth while others struggle. This deposit migration wave is reshaping the industry.
Deposit Migration Wave Drives Industry Transformation
The ongoing deposit migration wave is fundamentally altering China’s financial landscape. As deposit rates continue to decline, savers are increasingly turning to wealth management products in search of better returns. This shift is not just a temporary trend but a structural change in how Chinese households manage their finances.
The numbers tell a compelling story. The single-month increase in non-bank financial institution deposits—a proxy for funds flowing into investments like wealth management products—reached an unprecedented RMB 2.14 trillion in July. At the same time, household deposits shrank by RMB 1.11 trillion, marking one of the largest monthly outflows in recent history. This deposit migration wave is fueled by several factors:
– Declining deposit rates making traditional savings less attractive
– Growing investor appetite for higher-yielding products
– Improved financial literacy and access to investment platforms
– Economic recovery boosting confidence in riskier assets
Macroeconomic Drivers Behind the Shift
The deposit migration wave didn’t happen overnight. It’s the result of deliberate policy moves and changing market conditions. The People’s Bank of China has been gradually lowering deposit rates to encourage spending and investment, pushing savers toward other financial products. Meanwhile, the rebound in equity markets has created a ‘wealth effect,’ making investors more willing to take risks.
As Bo Tong Consulting chief analyst Wang Pengbo (王蓬博) notes, ‘The continuous decline in deposit rates has accelerated the transfer of household savings into net-worth-based wealth management products, providing a stable source of funds for the industry.’ This deposit migration wave is expected to continue as interest rates remain low and investors become more comfortable with non-guaranteed products.
Performance Divergence: Winners and Losers
The deposit migration wave has created a clear divide between top-performing wealth management firms and those struggling to keep up. Among the 24 firms that disclosed first-half data, combined net profit reached RMB 156.67 billion, but growth was uneven. While most firms saw increases, some experienced significant declines.
Leaders of the Pack
Six firms stood out with net profits exceeding RMB 10 billion: CMB Wealth Management (招银理财), BOC Wealth Management (中银理财), ABC Wealth Management (农银理财), CIB Wealth Management (兴银理财), CITIC Wealth Management (信银理财), and CEB Wealth Management (光大理财). CMB Wealth Management led with RMB 13.64 billion, though this represented a 5.74% decline from the previous year—showing that even industry leaders aren’t immune to market volatility.
On the other end of the spectrum, six firms reported net profits below RMB 2 billion, highlighting the growing gap between large and small players. This performance divergence underscores how the deposit migration wave is benefiting firms with strong resources and capabilities while leaving others behind.
Standout Performers
Some firms achieved remarkable growth despite the challenging environment. SPDB Wealth Management (浦银理财) saw net profit surge over 70% year-on-year to RMB 9.25 billion, putting it among the industry’s top tier. Bohai Bank Wealth Management (渤银理财), Chongqing Rural Commercial Bank Wealth Management (渝农商理财), and Huaxia Wealth Management (华夏理财) also posted impressive gains of 37.35%, 28.26%, and 21.73% respectively.
These success stories demonstrate how firms can capitalize on the deposit migration wave through strategic product offerings and effective distribution channels. As Wang Pengbo explains, ‘On the asset side, wealth management companies have increased their allocation to equity assets and optimized their ‘fixed-income+’ strategies, enhancing portfolio returns and product attractiveness.’
Foreign Firms Make Their Mark
One of the most notable developments during this deposit migration wave has been the rapid rise of foreign-backed wealth management firms. While domestic players still dominate, joint ventures with international financial giants are gaining significant traction.
Record Growth Rates
BNP Paribas ABC Wealth Management (法巴农银理财) saw its scale reach RMB 75.69 billion by June—a nearly fivefold increase from the previous year. Goldman Sachs ICBC Wealth Management (高盛工银理财) and BlackRock CCB Wealth Management (贝莱德建信理财) weren’t far behind, with scales of RMB 95.51 billion and RMB 120.78 billion representing growth of 364% and 200% respectively.
These extraordinary growth rates highlight how foreign firms are leveraging their global expertise and brand recognition to capture market share. As one industry insider noted, ‘Foreign wealth management subsidiaries are gradually establishing themselves in the domestic market with differentiated investment research capabilities, global resources, and brand advantages, becoming important drivers of industry structure changes.’
Competitive Advantages
Foreign firms bring several strengths to the table:
– Advanced risk management frameworks developed in mature markets
– Global investment perspectives and access to international assets
– Strong brand recognition among high-net-worth investors
– Innovative product structures and investment strategies
These advantages are particularly valuable during the current deposit migration wave, as investors become more sophisticated and demanding. While domestic firms still hold the majority of market share, foreign players are carving out profitable niches that could expand significantly in coming years.
Challenges and Pressure Points
Not all firms are benefiting equally from the deposit migration wave. Some are facing significant headwinds, particularly those with outdated product structures or weak distribution networks.
Struggling Performers
Ping An Wealth Management (平安理财) saw net profit decline by 41.28% to RMB 7 billion, one of the steepest drops in the industry. CMB Wealth Management, CIB Wealth Management, Hangzhou Bank Wealth Management (杭银理财), and Zhejiang Bank Wealth Management (浙银理财) also experienced various degrees of contraction.
These firms face the dual challenge of intensified competition and pressure on fee income. As Wang Pengbo explains, ‘The core reason for profit pressure on wealth management companies lies in the ‘ceiling’ of scale effects—asset management scale cannot expand indefinitely. At the same time, the industry-wide trend of lowering management fee rates directly compresses income space.’
Structural Vulnerabilities
According to Cui Shengyue (崔盛悦), researcher at Puyi Standards Research Institute, firms experiencing scale declines share common characteristics: their cash management products have mostly shrunk or shown weak growth. ‘The decline in market interest rates in 2025 has continued to suppress cash management products,’ Cui notes. ‘The bond market volatility in the first quarter caused a temporary contraction in the overall wealth management market scale. Although fixed-income products recovered in the second quarter driven by continuous deposit rate cuts, the scale of fixed-income products at some institutions has not returned to the level at the end of 2024, exacerbating the overall pressure.’
By the end of August, the nationwide scale of cash management products had fallen to RMB 6.74 trillion, a reduction of over RMB 500 billion from the end of the previous year. The average seven-day annualized return was approximately 1.35%, continuing to decline from June.
Strategies for Capturing Migrating Deposits
Wealth management firms looking to benefit from the deposit migration wave need to develop comprehensive strategies across products, channels, and customer service. Simply offering higher returns isn’t enough—firms must address investor concerns about risk, liquidity, and transparency.
Product Innovation
Cui Shengyue believes that in a low-interest rate environment, wealth management companies need to make efforts from multiple dimensions including products, channels, and services. ‘On the product side, different customer needs can be matched through layered design: on one hand, launching low-volatility stable products to承接存款迁移资金 (receive deposit migration funds) and lower investment thresholds; on the other hand, based on fixed-income advantages, appropriately布局权益市场机会 (arrange equity market opportunities) to achieve a combination of ‘stable foundation + elastic thickening’.’
Pan Shuyue (潘姝月), senior associate director of the financial business department at Oriental Jincheng, recommends that wealth management companies optimize product structure, develop ‘deposit replacement’ and yield enhancement products, improve investment research capabilities and risk management levels, and strengthen net value fluctuation response mechanisms to enhance income stability.
Balancing Risk and Return
While equity markets have rebounded, wealth management products remain conservative in their allocations. The China Banking Wealth Management Market Annual Report (2025H1) shows that as of the end of June, the scale of equity products was only RMB 0.07 trillion, still accounting for a low proportion.
A person from a major bank’s wealth management company stated that the overall risk preference of wealth management customers is limited, and coupled with uncertainty about macroeconomic recovery, the proportion of equity assets in wealth management allocation is unlikely to increase significantly in the short term.
Nevertheless, the industry generally believes that the value of equity allocation is rising. Pan Shuyue adds that wealth management companies can rely on multi-asset, multi-strategy advantages to increase the layout of fixed-income+ and equity-containing products, and control risk drawdowns through structural layering and hedging design. Some wealth management companies have already taken action in the first half of the year. For example, as of the end of June, CITIC Wealth Management’s scale of equity-containing products was RMB 207.08 billion, an increase of RMB 18.579 billion from the end of the previous year, with the proportion of new products increasing from 9.68% at the beginning of the year to 9.83%.
The Road Ahead: Opportunities and Risks
The deposit migration wave presents both significant opportunities and substantial risks for wealth management firms. Those that adapt quickly to changing investor preferences and market conditions will likely thrive, while others may struggle to remain relevant.
Emerging Opportunities
Beyond traditional fixed income and equity products, gold is becoming a new focus for wealth management companies. As the U.S. dollar weakens and global risk events occur frequently, gold’s value as a hedge and safe haven becomes apparent. Recent sustained increases in gold prices have prompted UBS Wealth Management to raise its 2026 gold price forecast in late August, with a target range of up to $3,700 per ounce. Industry insiders believe that central bank purchases and the declining status of the U.S. dollar as a reserve currency provide long-term support for gold.
However, multiple institutional sources have cautioned that gold may experience high volatility in the short term and should not be chased blindly at current levels. ‘We still看好黄金的长期配置价值 (are optimistic about gold’s long-term allocation value), but from the current point, there lacks a clear buy signal like at the end of last year,’ admitted a person from a joint venture wealth management subsidiary.
Navigating Risks
The current environment presents several risks that wealth management firms must navigate carefully:
– Interest rate volatility affecting fixed income portfolios
– Equity market corrections that could trigger mass redemptions
– Regulatory changes that might impact product structures or fee arrangements
– Intensifying competition from both domestic and foreign players
Firms that develop robust risk management frameworks and maintain transparent communication with investors will be best positioned to weather potential storms.
The deposit migration wave represents a fundamental shift in China’s financial landscape that will likely continue for the foreseeable future. Wealth management firms that successfully adapt to this new reality—by developing innovative products, strengthening risk management, and enhancing customer experience—will emerge as winners in this transformed marketplace. For investors, this means more choices and potentially better returns, but also requires greater diligence in selecting appropriate products and providers. As the industry continues to evolve, staying informed about market developments and understanding your own risk tolerance becomes increasingly important for achieving financial goals.