Equity funds and hybrid funds contributed to most of the combined profits, as they realized total income of 80 billion yuan, about 63.5 percent of all the yields of funds in China in 2012, according to the TX information.

Combined income from fund management, fund custodian and commission for the 70 fund management companies saw significant drops.

Combined income from fund management dropped 10 percent from that in 2011 at 26 billion yuan, the analysis showed.

"Fund companies will see fiercer competition in 2013 as more sales channels are allowed and several banks are allowed to set up their own fund management companies," added Zhu Lei, analyst with Aijian Securities Co Ltd.

Five commercial banks, namely Bank of Ningbo Co, Industrial Bank, Bank of Beijing, Bank of Nanjing and Bank of Shanghai, have been allowed to set up fund management companies under a pilot program approved by the State Council.

The China Securities Regulatory Commission said that increased participation by banks in the pilot program will help develop more channels for savings to be orderly transferred into the capital market, involving more institutional investors, and boosting the development of the funds industry.

The commission said in March it will permit a wider range of companies, including foreign banks, to distribute products from local mutual fund managers as of June 1, which will give foreign lenders access to growing fund market.

By the end of 2012, China's fund management companies managed some 3.62 trillion yuan, a 31 percent year-on-year growth, according to statistics from CSRC.

wuyiyao@chinadaily.com.cn