SHANGHAI — China’s brick-and-mortar banks are launching a counter-attack against their business from Alibaba and other Internet heavyweights in a bid to staunch the outflow of bank deposits into high-yielding online investment products.
In less than eight months, Alibaba’s money market fund, Yu’e Bao, has attracted $66 billion in assets under management, more than the customer deposits held by the five smallest listed Chinese banks.
Similar online products from Baidu and Tencent Holdings also contributed to a fall of 1 trillion yuan in traditional bank deposits in January.
Now traditional lenders are striking back.
Industrial and Commercial Bank of China, Bank of China, Bank of Communications and Ping An Bank have all launched new products that match the features of Yu’e Bao.
Banks are also lobbying regulators to introduce curbs on the growth of online funds offered by non-banks.