China Construction Bank's wealth management products (WMP) account for only seven percent of its total funding, the bank disclosed, although concerns remain that other Chinese banks are relying heavily on sales of the off-balance-sheet products to supplement their eroding deposit base.
CCB , China's second-largest bank by market value, had 824 billion yuan ($132.19 billion) in WMPs outstanding by the end of the third quarter, the company told Reuters in response to written questions.
That figure compares with the bank's 12.3 trillion yuan in total liabilities, of which 11.1 trillion are customer deposits.
The relatively small amount of wealth management products suggests that the explosive rise of WMPs - which are attractive to customers because they offer yields higher than traditional bank deposits - have so far not significantly cannibalized the traditional deposit base, at least for some large banks.
CCB is different. They have been very conservative on wealth management products, said Dorris Chen, head of China research at BNP Paribas in Shanghai.
WMPs are not subject to the Chinese government's mandatory cap on deposit interest rates because returns - and in some cases, principal - is not guaranteed. But analysts say Chinese savers widely perceive the products as carrying an implicit government guarantee.
CCB also said that 80 percent of these products are invested in the bond market and other portion in interbank deposits. That should also allay fears that a large portion of WMPs are invested in risky, illiquid assets like high-interest loans to real estate developers.
While CCB's low ratio will come as a relief to CCB's shareholders, analysts warn that the bank has been among the most consevative when it comes to chasing customer funds by selling WMPs. Smaller banks such as China Merchants Bank and Bank of Communications rely more heavily on WMPs to attract funds.
Some analysts say that such heavy reliance raises the risk of a liquidity crisis in China' banking system arising from the maturity mismatch between assets and liabilities.
Bank of China chairman Xiao Gang raised eyebrows last month with an opinion article in state-run media in which he compared WMPs to a Ponzi scheme, referring to the temptation for banks to fund payouts of maturing WMPs through new issuance rather than maturing assets.
Under certain conditions, the music may stop when investors lose confidence and reduce their buying or withdraw from WMPs, he wrote.
Market watchers also noted that the lack of official data on these wealth management products forced even the chairman of China's fourth-largest bank to rely on Fitch Ratings, which estimates they account for 16 percent of total bank deposits.