The reform of the local rural credit system has provided an opportunity for local rural commercial banks to apply for licenses for wealth management subsidiaries.

Currently, the Agricultural and Commercial Bank of China in Jiangsu and Zhejiang provinces, which have completed their restructuring, are applying for a wealth management subsidiary license. On May 25, 2026, reporters called relevant personnel from Jiangsu Rural Commercial United Bank and Zhejiang Rural Commercial United Bank respectively to verify. Both parties stated that the relevant work is being carried out and the announcement shall prevail.

Previously, individual rural commercial banks in the region had limited business scale and strength, making it difficult to obtain approval for a separate application for a wealth management subsidiary license. In August 2025, Chengdu Bank, Chengdu Rural Commercial Bank, and Sichuan Bank had planned to jointly apply for a wealth management subsidiary license, but there has been no new progress so far.

A person in charge of a bank's wealth management subsidiary told reporters that the qualifications of the parent bank and the scale of its wealth management business are important concerns for regulatory authorities in reviewing license applications.

In addition, regulatory authorities also value the operational capabilities of applying banks in areas such as wealth management company governance, asset management capabilities, risk management, information disclosure, investor rights protection, and information technology, "said the person in charge of the aforementioned wealth management subsidiary. Especially in the context of regulatory authorities' increasing emphasis on penetrating supervision and risk isolation, even rural commercial banks with large asset sizes need to achieve the higher regulatory rating set by the Interim Measures for the Regulatory Rating of Wealth Management Companies before applying for a wealth management subsidiary license.

Waiting For Feedback

As the head of the wealth management business department of a rural commercial bank in the central region, Hong Qiang has been closely following the latest developments in the application for a wealth management subsidiary license by rural commercial banks.

After learning about the application actions of the Agricultural and Commercial Bank of China in Jiangsu and Zhejiang, he inquired with colleagues from the two banks about the preconditions and specific admission requirements put forward by the local financial regulatory authorities for license applications.

At present, the response he received is that the two rural commercial banks in Jiangsu and Zhejiang have submitted relevant applications and are still waiting for feedback from relevant departments.

Hong Qiang said that compared to the Agricultural and Commercial Bank of China where he works, the Agricultural and Commercial Bank of China in Jiangsu and Zhejiang has a greater advantage in terms of business scale.

According to data, Jiangsu Rural Commercial United Bank was formed by integrating 60 local small and medium-sized rural commercial banks, with an asset size of over 5 trillion yuan. It is the largest financial institution in Jiangsu Province in terms of asset size, the widest coverage of branches, and the largest customer base. As of the end of June 2025, the deposit and loan balances of Jiangsu Rural Commercial Bank system were 4.13 trillion yuan and 3.25 trillion yuan, respectively, ranking first in the banking industry in the province.

Zhejiang Rural Commercial United Bank was established by integrating 82 county (city, district) rural commercial banks and rural credit cooperatives. As of the end of June 2025, the total assets of the rural commercial bank system in the province amounted to 7.02 trillion yuan, with deposit and loan balances reaching 4.93 trillion yuan and 3.92 trillion yuan, respectively.

This enables the two rural commercial banks mentioned above to have a strong business scale effect in applying for wealth management subsidiaries.

As the head of wealth management business at a city level rural commercial bank in Jiangsu, Liu Yan is also closely monitoring the progress of the parent bank's application for a wealth management subsidiary license.

She found that applying for a wealth management subsidiary license under the name of the restructured Rural Commercial Bank still needs to solve many problems, including whether the small and medium-sized commercial banks included in the Rural Commercial Bank can complete the unified centralized operation and management of wealth management business and backend systems; Whether the standards for risk control, compliance, operation, and information disclosure related to financial management business are "consistent"; Has the risk event of financial management business that occurred in the past been properly handled and will not happen again.

According to the Management Measures for Wealth Management Subsidiaries of Commercial Banks, in addition to meeting the minimum registered capital requirement of 1 billion yuan for wealth management subsidiaries, commercial banks as controlling shareholders of wealth management subsidiaries should also establish a wealth management business exclusive department to implement centralized and unified management of wealth management business, and the wealth management business exclusive department should operate continuously for more than 3 years.

Zhejiang Rural Commercial United Bank, established in 2022, has set up an asset management department and its operating time basically meets the requirement of "3 years". The former Banking and Insurance Regulatory Bureau of Zhejiang Province stated in November 2022 that it would take the approval of the pilot plan for deepening the reform of rural credit cooperatives in Zhejiang Province as an opportunity to support Zhejiang Rural Commercial United Bank in initiating the establishment of a wealth management subsidiary.

In comparison, Jiangsu Rural Commercial United Bank was established in April 2025 and needs to find a compliant and feasible solution to meet the requirement of "continuous operation of the wealth management business exclusive department for more than 3 years" in order to successfully obtain the wealth management subsidiary license.

Currently, we are also waiting for feedback from relevant departments, "Liu Yan said.

Application Test

According to a research report by Guosen Securities, applying for a wealth management subsidiary through the Provincial Cooperative or the Provincial Rural Commercial United Bank can not only increase the source of deposit funds on the debt side, but also increase intermediary business income.

Liu Yan frankly stated that in addition to the above two factors, the local Rural Commercial Bank also hopes to solve the problem of difficulty in finding high-quality assets by establishing a wealth management subsidiary.

Due to high customer stickiness, we face relatively less deposit loss pressure due to the reduction of self operated wealth management scale. However, due to the impact of macroeconomic fluctuations in recent years, our high-quality assets on the asset side have decreased by more than 20% compared to before 2020, "she said. Therefore, the Rural Commercial Bank where she works also hopes that Rural Commercial United Bank can be approved to establish a wealth management subsidiary as soon as possible. By creating wealth management products with different investment styles, it can leverage more investable assets and broaden the asset allocation scope of the bank's asset side.

Hong Qiang's Rural Commercial United Bank has reduced its wealth management scale by over 35% in the past two and a half years, with a current scale of less than 100 billion yuan, resulting in a loss of over 28 billion yuan in deposits. Under the wave of deposits moving towards wealth management, these deposits have turned to wealth management products of other large local banks.

In order to retain these customers, Hong Qiang once increased the sales of wealth management products. But he soon realized that this move was not effective. The reason for this is that the supply of high-quality wealth management products is limited, making it difficult to meet the deposit and wealth management needs of residents; Secondly, many wealth management products have obvious "adaptation to the local environment". In the local county-level market, residents have relatively conservative risk preferences and prefer to subscribe to pure bond fixed income wealth management products with a risk level of R2 (medium low risk) and an annualized return rate of over 2.2%. However, cooperative wealth management subsidiaries provide "fixed income+" wealth management products with a risk level of R3 (medium risk) to meet product return requirements. Local residents are discouraged by these "fixed income+" products entering equity investments.

However, rural commercial banks are facing new challenges in applying for a wealth management subsidiary license through a "group" approach.

At the end of April, Hong Qiang learned from a colleague in the wealth management department of a rural commercial joint bank in the western region that when communicating with the local financial regulatory department about whether to apply for a wealth management sub license, the latter was told that "the operating ability of the applying bank for the wealth management subsidiary needs to first reach the 1-2 level regulatory rating results set in the Interim Measures for the Regulatory Rating of Wealth Management Companies".

In March of this year, the Interim Measures for the Supervision and Rating of Wealth Management Companies were officially implemented. Through the establishment of six rating modules, namely corporate governance, asset management capability, risk management, information disclosure, investor rights protection, and information technology, scores were assigned weights of 10%, 25%, 25%, 15%, 15%, and 10% respectively. Targeted additional, deduction, and level adjustment factors were set to comprehensively evaluate the operation and risk status of wealth management companies.

According to relevant regulations, the regulatory rating results for wealth management subsidiaries are divided into levels 1-6 and S-level. Among them, levels 1-2 indicate that the wealth management subsidiary operates steadily and has a good risk situation. The supervision is mainly based on off-site and routine supervision, and priority is given to supporting innovative pilot businesses such as pension wealth management; Levels 3-4 indicate that the wealth management company has certain or more risk issues, and supervision needs to be strengthened in key areas, taking necessary corrective measures to control incremental risks, reduce existing risks, and prevent risk diffusion; Levels 5-6 indicate that the wealth management company has serious risk issues, and regulatory authorities need to track risk changes in real time, strictly limit and resolve high-risk businesses, and implement risk disposal or market exit in an orderly manner; S-level judgment indicates that a wealth management company is in the process of restructuring, being taken over, or implementing market exit, and will not participate in the regulatory rating for that year.

After the May Day holiday, Hong Qiang referred to relevant regulatory rating requirements and conducted a self-examination of the internal governance, asset management capabilities, risk management, information disclosure, and investor rights protection of the wealth management business department, and rectified any problems found.

At present, we are in the pre communication stage before applying for the license of our wealth management subsidiary. We hope that the Agricultural and Commercial Bank of Jiangsu and Zhejiang can make a breakthrough in applying for the license of our wealth management subsidiary as soon as possible, so that we can take a ride, "Hong Qiang said.

(At the request of the interviewee, Hong Qiang and Liu Yan are given pseudonyms in the article)