In this new era of financial development, the trust industry is actively exploring effective solutions for managing risk assetsThe landscape is shifting, presenting new challenges and opportunities as companies navigate a complex marketplace.
As of mid-June this year, several trust companies, including Sichuan Trust, New Era Trust, and Jilin Pan-Asia Trust, have made significant progress in risk resolutionThese advancements have taken various forms, such as market-based restructuring and the introduction of strategic investors, showcasing a diversified approach to tackling risk.
Analysts point out that given the market-oriented and legal frameworks, future risk management strategies for trust companies will increasingly rely on these mechanisms
It hints at a paradigm shift where companies are expected to adapt and comply with regulatory demands while fortifying their risk management practices.
The current stringent regulatory environment is prompting trust companies to accelerate their transformationThere has also been a notable turnover in the upper management of many firms, with continuous optimization of business structuresAs a result, the scale of trust assets is showing signs of recovery, nearing a staggering 24 trillion yuan.
This year has seen an intensified push in the trust sector to expedite the resolution of asset risksTrust companies are showcasing their strengths and capabilities through a range of tactics, including market restructuring and the introduction of strategic investors, which reflects a more dynamic approach to risk resolution.
Recent developments indicate that various trust companies are making tangible progress in resolving their legacy risks
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For instance, Sichuan Trust aims to reconstruct its equity structure to address its debt risksAs announced on the national corporate bankruptcy reorganization case information website, Sichuan Trust is actively seeking to recruit and select reorganization investors, with applications closing on June 24.
The goal of this recruitment initiative is to attract strong restructuring partners who can inject capital, thereby wholly resolving Sichuan Trust's debt risks, optimizing the asset structure of the debtors, and ultimately restoring the company's regular operations.
Prospective investors interested in participating in the risk mitigation efforts of the trust company must meet specific criteria relevant to the scale of its debts
Investors are expected to demonstrate clear social responsibility, possess a strong commercial reputation, and have no significant legal violations in the past three yearsAdditionally, they must have substantial financial resources for investment restructuring, with registered capital of at least 3 billion yuan and audited total assets not less than 50 billion yuan.
Other companies, such as Jianyuan Trust and New Era Trust, are also reporting new developments as the pace of risk resolution picks up.
Jianyuan Trust, for example, has recently decided to transfer a 3.4% equity stake in China Citic Bank International to the Shanghai branch of Bank of ChinaFollowing the completion of necessary decision-making processes by both institutions, Jianyuan Trust plans to expedite the asset delivery process.
Meanwhile, New Era Trust's plan to transfer 100% of its 6 billion shares is now listed on the Beijing Equity Exchange, with the tender period running from May 17 to June 14, and a reserve price set at 1.8512 billion yuan
Upon completion of the transfer, the new owners will be required to facilitate and collaborate with regulatory authorities in the risk management endeavors of New Era Trust.
Moreover, Jilin Pan-Asia Trust, which has been inactive for 18 years, is actively seeking to recruit restructuring investors, a registration process that ended on May 10. This move is aimed at effectively advancing the reorganization efforts of Pan-Asia Trust to alleviate its debt crisis, restore its ongoing operations, and safeguard the equitable rights of creditors.
The trust industry is witnessing a revitalization, evidenced by the accelerated pace of risk resolutionTrust asset scales are approaching 24 trillion yuan, with statistics from the China Trustee Association revealing that by the end of Q4 2023, the total trust asset scale was approximately 23.92 trillion yuan, reflecting a quarter-on-quarter increase of 5.65% and a year-on-year growth of 13.17%.
Since the second quarter of 2022, the trust industry has maintained positive growth for seven consecutive quarters, with growth rates steadily increasing, indicating a healthy rebound in the sector.
In 2023, it is reported that the total operating income of the trust industry reached 86.361 billion yuan, showing a slight year-on-year growth of 2.96%. The net profit was recorded at 42.373 billion yuan, with an overall profit growth of about 2.29% compared to the previous year after stripping away extraordinary items.
The introduction of the "three business classifications" regulation has visibly influenced the transformation within the trust industry, with companies vigorously developing standard product trusts
According to the data from China Trust Registration, from June to December 2023, a total of 30,415 trust products were established, amounting to an impressive scale of 43.325 trillion yuan.
With the continued focus on standard product trusts, investments directed towards the securities market and financial institutions are consistently increasing, reaching a total trust scale of 17.38 trillion yuan by the end of Q4 2023, a quarter-on-quarter increase of 5.66% and a year-on-year increase of 15.59%. Notably, the capital aimed at the securities market alone (including stocks, funds, and bonds) totaled 6.6 trillion yuan, accounting for 38% of the total, marking a 3 percentage point increase.
Currently, the trust industry is in a phase of transformation and quality enhancement, ushering in a wave of leadership changes, significantly impacting the sector