China Construction Bank Corp said yesterday that it is investigating allegations by investors that a clerk at the country's second-biggest lender misled them into buying a wealth management product that underperformed.
Seven investors have complained to the country's banking and securities regulators after the product lost over 30 percent of its value after being sold to them as a fixed-income product with guaranteed returns, the National Business Daily said on Wednesday.
The CCB customers had bought the product issued by Northeastern Securities via a CCB branch in Jilin Province, the newspaper said.
CCB is investigating the matter, a spokeswoman for the bank said.
The dispute highlights the risks linked to wealth management products, which had grabbed national media attention earlier this month when a product sold to retail investors at a branch of Hua Xia Bank in suburban Shanghai failed to pay out.
On Monday, CITIC Trust, run by one of China's largest investment firms, said it had delayed an interest payment due on an investment instrument marketed to wealthy investors mainly through banks.
The incidents had fuelled concerns over the health of the business that has ballooned to nearly 7 trillion yuan (US$1.12 trillion) as depositors seek higher investment returns.
Wealth management products have taken off in the past five years, with Chinese looking for investment choices other than real estate, betting on the country's roller-coaster stock markets or parking money in bank accounts that offer state-set deposit rates.