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Fitch, the rating agency, said in a report Tuesday that the inclusion of unsecured wealth management products in the balance sheets of Chinese banks could drag the capital buffers required by regulators. Financial products are the main source of shadow banking.

Chinese regulators have stepped up their oversight of financial assets, such as wealth management products, as a result of rising debt concerns. Financial products are usually sold by banks, not included in the balance sheet.

If unsecured wealth management products are included in the statement, Fitch's average common-equity tier-1 capital ratio will fall by 1.4 percentage points, while the middle-bank sector will fall by 2.5 percentage points, Fitch said in its report.

Fitch said the higher the cost of financial products income is unlikely to be sufficient to compensate for the additional risk, saying that as long as 2% of the outstanding financial products impairment, is sufficient to erase the business accumulated all the profits.

"China's banking regulators have recently tightened regulation of wealth management products," Fitch's report said. "The new rules will bring more costs to the bank's ability to profit."

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