China's banking industry has seen a boom in its managed assets following the fast expansion of banks' asset custody business, the China Banking Association said Thursday.

Assets under the management of Chinese banks reached a record 14.15-T Yuan (US$2.25-T) by the end of Y 2011, an increase of 49.27% from a year earlier, according to a report released by the association.

The figure marked a rise of 277% from 3.75-T Yuan in Y 2009, the report said.

First in the form of a closed-end securities investment fund established in Y 1998, the asset custody service has become a fast-growing banking business that covers extensive domains, the report said.

In the asset custody business, banks serve as the 3rd party to take care of the entrusted assets and perform various duties, including account settlement, asset evaluation and investment oversight, according to trust contracts and regulations.

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The assets of five custody products currently exceed 2-T Yuan each. Wealth investment products take the biggest share, valued at 3.89-T Yuan, followed by entrusted insurance funds at 2.65-T Yuan and entrusted property 2.31-T Yuan.

By the end of Y 2011, 18 Chinese commercial banks, including the Industrial and Commercial Bank of China, the country's largest lender, obtained the qualifications necessary to run such businesses.

Their custodians' fees totaled 16.8-B Yuan as of the end of Y 2011.

Paul A. Ebeling, Jnr.

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