What is a structured deposit? Is it a bank deposit or a wealth management product

The retail structured deposit business of China Merchants Bank means that individuals deposit legally held RMB funds into our bank, and our bank embeds financial derivative transactions (including but not limited to options, swaps, forwards, etc. On the basis of deposit, the customer's deposit income is linked to specific financial indicators such as exchange rate, precious metal price, interest rate and stock price. , so that depositors (investors) are expected to obtain higher-yield deposits on the basis of taking certain risks.

The "structured deposits" of banks are actually deposits rather than wealth management products, and their sales and capital measurement are compared with deposits. The difference between structured deposits and wealth management products is mainly reflected in the following four aspects:

1. Application of principal: The principal of structured deposits is flexibly used by the bank's self-operated funds for the same purpose as general deposits. The principal of wealth management products is invested by the asset management department according to the entrustment of customers, and the investment direction is also agreed in advance in the product specification.

2. Account management: structured deposit funds can be inquired in customer deposit accounts at any time, which is consistent with general deposits. The wealth management funds are not reflected in the customer's deposit account, and only the entrustment contract can be queried.

3. In terms of principal accounting: Yinfa No.2008369 stipulates that banks should add "structured deposits" statistical indicators, and gives the definition of structured deposits "refers to deposit products embedded with derivatives or income-linked stock indexes, exchange rates and other indexes." The Bank conducts accounting according to regulatory requirements. And reported to the central bank, according to the general deposit to pay the deposit reserve, included in the assessment of loan-to-deposit ratio.

4. In terms of income accounting: the customer income of structured deposits of the Bank is reflected in the form of interest, and is accounted for under the subject of "interest expense". The income payable by wealth management products to customers is included in the corresponding liabilities.

(Response time: April 2, 2022. Please refer to the latest business changes announced by China Merchants Bank in official website. )