Wealth management products (WMPs) offered by banks in China experienced a wave of massive pre-mature redemptions since July due to onshore stock market turmoil, China Securities Journal reported Thursday.
As of end-August, eight Chinese lenders including large banks such as China Merchants Bank Co. Ltd. (600036.SH; 03968.HK) and China Construction Bank Co., Ltd. (00939.HK; 601939.SH) redeemed a combined total of 50 WMPs before the maturity dates.
The report said despite that, almost all those wealth products were called at promised yields with principal fully repaid.
Market watchers said such a wave of early redemptions was likely to continue in the future. Banks' WMPs are typically short-term investments that banks sell as a high-yield alternative to deposits.
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