Post Bureau may sell mutual funds
(Shanghai Daily)
Updated: 2006-08-08 15:29 China's State Post
Bureau will sell mutual funds for the first time starting on Monday as part of
an effort to add financial services before its restructuring.
The bureau plans to allow some 2,300 outlets, mainly in the capitals of each
province, to serve as agents selling the Dacheng 2020 Life Cycle Fund, managed
by Dacheng Fund Management Co, people familiar with the deal said yesterday.
Training programs started early last month to acquaint postal employees with
the fund sales process, and the program may be expanded if the trial proves
successful, the sources said.
China has been trying for years to bail out the unprofitable banking business
at the postal bureau and increasing efforts to curb fraud and enhance
efficiency.
China's Cabinet has approved a plan to separate the bureau's banking arm from
its postal system in six months by setting up a savings bank that would be
China's No. 2 bank by outlets and fifth-biggest by deposits.
China's postal bureau now operates more than 36,000 outlets nationwide and
has 270 million account holders as well as 90 million debit-card clients,
according to its Website.
In addition to delivering mail and issuing stamps, the bureau also takes
deposits, helps insurers sell policies and processes client remittances.
Analysts expect that allowing postal outlets to sell mutual funds, a business
currently dominated by commercial lenders, may facilitate the banking business
shift and add a new revenue channel.
The move also will set the stage for the postal authority to market the
mutual fund products of its own money-management firm, China Post & Capital
Fund Management Co, in which the bureau holds a 24 percent stake.
The postal agency plans to increase its holding to "a controlling portion" in
the fund venture, which has yet to establish a product, according to earlier
news media reports.
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