The latest window guidance of trust companies: control the concentration of real estate trust does not exceed 40% of the active management scale

2022-06-16 0 By

This article is from: China Business Network reporter Chen Jialing Beijing report is in the risk management and transformation of trust companies in the exploration of how to expand the industry, where to go, the industry has been looking forward to new regulatory guidance.China Business News has learned that some trust companies have recently received guidance from the regulatory window that the balance of non-standard financing at any time should not exceed the balance at the beginning of the year.The concentration of real estate trust shall not exceed 40% of the active management trust scale.In addition, according to media reports, some trust companies have received window guidance on “no new credit asset property rights trust, inventory pressure drop”.”We haven’t been told yet, but we should be down soon.In the next few days (the CBRC) is likely to issue targeted requirements to local bureaus and trust companies.Beijing-tianjin-hebei region a trust company vice – general told our reporter.It is reported that the CBRC earlier held a meeting on trust supervision, revealed that it will continue to reduce the scale of trust channel business and illegal financing business in 2022, but the specific scale of pressure reduction indicators have not given clear guidance.”Trust companies will continue to reduce financing quotas and control real estate quotas.”A senior executive of a state-owned trust company in northern China told China Business News, “Last week we received window guidance from the regulatory authorities that the balance of non-standard financing at any time should not exceed the balance at the beginning of the year;The concentration of real estate trusts should be controlled to no more than 40 percent of the actively managed trusts.”The window guidance policy appears to be a mixed blessing for the trust industry.One said: “Policy is tightening beyond our expectations, not easing.”Others said: “Before, the annual pressure drop was 20%, and at the end of 2021, the regulatory standard is still 20% in 2022, but now it seems to have been adjusted, it should be said that a little more relaxed than before.”In terms of financing business, in the context of trust industry transformation, since 2020, regulators have repeatedly sent signals to reduce the scale of non-standard financing.The latest data from the China Trust Industry Association shows that under the background of the regulatory authorities’ policy of continuously reducing financing trust, the scale of financing trust dropped to 3.58 trillion yuan at the end of 2021, 1.28 trillion yuan less than the end of the previous year, a drop of 26.28%.Compared with the peak in 2019, the total pressure of financing trust dropped by 2.25 trillion yuan in the two years.Real estate trust business is also mentioned in this window guidance.In this regard, it is worth noting that the regulation proposed to “control the concentration of real estate trust” and set the red line that the proportion should not exceed 40%.According to the data of 68 trust companies’ 2020 financial statements, 60 trust companies with annual report data available disclosed the scale and proportion of trust assets invested in real estate business.According to the relevant data, the real estate business of some trust companies accounts for nearly 50% of the asset distribution, while the real estate business of most trust companies mainly accounts for less than 30%.Among them, the 10 trust companies with the highest proportion of real estate trust in the distribution of trust assets at the end of 2020 are:Hangzhou Industrial & Commercial Trust (62.14%), Wanxiang Trust (58.10%), Aijian Trust (43.53%), China Credit Trust (39.42%), Beijing Trust (38.20%), China Construction Investment Trust (35.72%), Huachen Trust (34.71%), Anxin Trust (34.37%), Great Wall Trust (31.44%),Lujiazui Trust (27.11%).It is worth noting that in the calculation of the above proportion, the “trust assets” as the denominator includes the actively managed trust assets and the passively managed trust assets, and the “red line” given by this regulation means that it does not exceed 40% of the actively managed trust scale.In addition, from an industry-wide perspective, trust assets under entrusted management stood at 15.01 trillion yuan by the end of the fourth quarter of 2021, among which 1.76 trillion yuan, or 11.74 percent, was invested in the real estate industry, according to the Trust Industry Association.Several trust companies have also received window guidance on property trust business, according to media reports.”We have also been informed and have suspended operations.”An industry insider told China Business News that the window guidance his company received was that new property rights trusts with bank credit assets as the underlying assets should not be added, and the existing such businesses should be gradually reduced in accordance with the inter-bank channel business.”[The regulation] is not particularly important because a lot of trust companies are not doing it.”The aforementioned trust company executives pointed out to the reporter’s analysis that this kind of property rights trust business in the industry has been questioned by the financial trade channel.Issuing relevant window guidance, or based on the industry supervision logic of continuing to reduce the scale of trust channel business and the scale of illegal financing business.”Property rights trust in the traditional sense is the transformation direction advocated by the regulatory authorities. What is the business essence of property rights trust with bank credit assets as the underlying assets mentioned in this window guidance, and what role do trust companies play?To this, there is still no small controversy in the current industry.There is a point of view in the industry that the credit asset property rights trust is a new channel set up for banks.But others disagree.”This should not be identified as a channel for trust companies to set up property rights trusts as SPVS, which can be understood as transaction management.But is transaction management the equivalent of a financial peer channel that needs to be de-pressured?”So said the insider.According to our reporter’s understanding, the main business model of banking Credit Assets Registration and Circulation Center Co., LTD. (hereinafter referred to as “Yindeng Center”) is loan creditor’s rights transfer, creditor’s right transfer, trust beneficial rights transfer;The latter two businesses often trust companies.At present, Yindeng Center mainly transfers beneficial rights of credit assets trust.The beneficial right of the trust transfer of credit assets business, is by the licensor (usually Banks, consumer finance companies, etc.) as a client, it intends to transfer the credit assets entrusted to trust, established by trust bootstrap type property trust, then introduce the public accounting firms, law firms, rating agencies and other intermediary agencies to evaluate and provide relevant opinions,The underlying assets of the property rights trust are structured and stratified, and the transferor enjoys the beneficial rights of the trust.The above industry insiders believe that compared with the credit asset securitization (CLO) in the interbank market, the bank credit asset circulation of Yindeng Center belongs to the nature of private placement.At present, Yindeng Center not only has a very detailed set of business rules and information disclosure requirements, but also has to register and issue every project, give opinions and ratings through accountants and lawyers, and some projects are also reviewed by external experts.In general, the circulation of credit assets in Yindeng Center is very standardized, and it is not fundamentally different from the securitization of credit assets in the interbank market, which belongs to asset securitization.”But from the perspective of legal management and business logic, it should be asset securitization.””In addition, there are a large number of credit asset circulation, stock asset activation and the need to reduce systemic risk in the current market, how to regulate the credit asset securitization market and credit asset circulation market, these are areas that need to be further clarified by supervision.”