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    The first anniversary of the new regulation of the asset management: the transition of the trust industry

    2019-05-15 08:12:56

    International financial newspaper

    Now, the new regulations for asset management have reached the first anniversary. What is of concern to the trust community is the impact of the new regulations on the industry? How do the trusts compete with banks, brokerages, funds and other institutions in the era of big capital management?

    Looking back on this year, the trust channel business and non-standard business were under pressure, and the asset scale shrank significantly. Under this circumstance, the trust company's performance in 2018 generally declined, and the industry differentiation was obvious.

    Although the trust will be significantly impacted by the new regulations in the short term, the long-term development of the industry will benefit. Many trust companies told the International Finance News reporter that during the transition, they returned to the trust. Trust companies are working hard on wealth management to increase capital competitiveness.

    Industry under pressure performance decline

    Back to April 27, 2018, the new rules for asset management will be implemented. Looking back on this year, going to the channel, breaking the redemption, and going to the pool of funds made the channel business and non-standard business suffer a big impact, and the asset scale shrank significantly. The channel business, which is the main source of income, has shrunk, and the performance of trust companies has declined.

    According to the Trust Industry Association data, as of the end of 2018, the size of trust assets fell by 13.5% year-on-year to 22.7 trillion yuan, which is the first consecutive decline in the scale of trust assets since the 2010 quarterly statistics. Among them, the proportion of single-fund trusts based on channel business decreased from 75% in 2010 to 43% at the end of last year.

    In such an environment, performance data also indicates that the trust company “has a bad life” in 2018. According to the data of the Trust Industry Association, the total revenue of 68 trust companies in the year of 2018 was 114.063 billion yuan, and the total profit was 73.18 billion yuan, down 4.2% and 11.2% respectively. Nearly 60% of the trust companies' net profit fell.

    Many trust company annual reports mentioned that the "new asset management regulations" is one of the factors affecting the overall decline in the industry.

    However, most of the asset management scale compression is a channel business that regulates arbitrage and conceals risks. For trust companies that actively manage their business, their performance is less affected.

    The trust industry has been hit by new regulations in the short term. Industry insiders told the International Finance News reporter: "The long-term is to help trust companies to take advantage of the trust system, enhance trust asset management capabilities and risk prevention and control awareness, and help promote long-term stability of the industry. development of."

    Industry differentiation is obvious

    Under the new regulations of the asset management, trust companies have become the consensus to go to the channel and strengthen active management. In the case of channel business reduction, some small and medium-sized trust companies in the industry that are over-reliant on this business have been affected, and the gap with the head company has further widened and the differentiation has become increasingly apparent.

    Overall, the first echelon of the trust industry has a relatively stable performance in 2018. According to the comprehensive strength ranking of trust companies issued by the benefit trust in 2018-2019, from the perspective of net profit ranking, CITIC Trust, Ping An Trust and Chongqing Trust accounted for the top three, namely 3.42 billion yuan, 3.17 billion yuan and 3.06 billion yuan respectively. In the past five years, the top three trust companies have also earned these three.

    “In recent years, about five trust companies have been able to stabilize in the top ten, and there will be some changes in the rankings every year. From the top ten rankings, there are three new entrants compared to last year.” Senior Trust Researcher Yuan Jiwei told International Finance The reporter said that “the overall risk resistance of the trust company is not strong, and the external environment changes rapidly, and there may be changes in the industry competition pattern.”

    The use of the trust research report also pointed out that some of the trust company's own assets have shrunk significantly, or the issued securities investment trust products are out of the market in advance, the losses are heavy, and the latest rankings are greatly affected.

    As a trust company with active management capabilities, Chongqing Trust's 2018 trust project net profit reached 5.55 billion yuan, an increase of 9.77%. The person in charge of the relevant department of Chongqing Trust told the International Finance News reporter: "The trust company has achieved good performance and cannot be separated from the company's capital strength, excellent risk management and management capabilities and management capabilities."

    CITIC Trust is also leading the performance. The relevant department head told the International Finance News reporter: "In the 2018 environment, the company's performance remains stable in the head, which is inseparable from the strengthening of internal capacity building and the improvement of asset quality. CITIC Trust has taken the initiative to transform into active management. In 2018, the proportion of active management trust assets accounted for 33.52%, an increase of 9.12% compared with 2017.

    In this regard, some analysts believe that the diversification trend of the collective trust business is obvious, and the concentration of the head trust company may continue to rise in the future.

    Transformation in the era of big capital management

    Nowadays, the first anniversary of the new regulations, the return of trust companies to the source and the promotion of active management capabilities have become the industry consensus. In an interview with the reporters of the International Finance News, several trust companies said that they should return to the trust source during the transformation process. At present, trust companies have made efforts to manage wealth and increase the competitiveness of capital.

    Yuan Jiwei analyzed the "International Finance News" reporter: "In addition to the scale of business, the fund side is also greatly affected by the new rules of capital management in 2018. Trust companies will face pressure from the capital side in the future."

    The reporter noted that a number of trust companies have transformed themselves into active management businesses and made efforts to build wealth centers. The person in charge of the relevant department of CITIC Trust told the reporter of "International Finance News": "In order to match the capital demand brought by the transformation of the asset-side business, the company promoted the construction of direct sales capability in 2018, and added a regional wealth center to enrich the sales team. Broaden customer service channels.” In 2018, the number of active direct customers increased by 14% year-on-year, and the proportion of direct sales of active management trust products increased by 49%.

    Chongqing Trust also holds a similar view, and it is especially important to further expand the active management business. Only by continuously strengthening the active management capability and serving the real economy can a trust company gain a foothold in the market competition. According to reports, Chongqing Trust upgraded the internal wealth center to the wealth management headquarters, and set up a new wealth team in Beijing, and will be deployed in many places in the country in the future.

    “How to find a real economy industry that is in line with national policy guidance and at the same time bring good business returns in your own field of expertise, and deepen and explore the potential of the industry is the key to the development of trust companies in the future.” The person in charge said.

    "The current fund trust management method has not yet been introduced, and some aspects of the implementation of the new asset management regulations are still unclear." Yuan Jiwei analyzed the reporters, but the trust company needs to speed up the research on the new regulatory requirements for transformation, comply with the general trend, and grasp the current situation. The asset management industry has the opportunity to build a asset management business and wealth management business with trust characteristics.

    A trust industry insider analyzed the "International Finance News" reporters, the effect of going to the channel has been very obvious, forced the trust company to return to the source and enhance the active management ability. It can be foreseen that in the future, the proportion of active management of trust companies will continue to rise, and trust companies will gradually develop from the pursuit of “quantity” to the pursuit of “quality”.

    From a macro perspective, a “harmony and different” large-capital market will open, and how trust companies will compete with banks, brokers, funds and other institutions. Some analysts believe that the new rules of the asset management and the series of policy orientation will also bring benefits to the trust in the wealth management market competition, so that it can stand on the same starting line as the currently relatively mature funds, brokers and bank wealth management.

    "From the perspective of trust management, the trust has been rectified in terms of sales and product leverage in accordance with the requirements of the new regulations." Yuan Jiwei analyzed, but in the core part of the non-standard valuation, breaking the redemption, etc. has not been fully issued. The non-standard assets of the new regulations of the asset management, and the current maturity date of the trust company's new products are all longer than the transition period of the new asset management regulations. After the formal implementation of the new asset management regulations in the future, the rectification pressure will be very large.

    Yuan Jiwei further analyzed that in the long run, trust companies need to solve their own strategic status problems. Although the trust system gives the trust company a broad business space, the future fund trust will face the competition of various asset management institutions. One is to strengthen the competitive strength in the fund trust, and the other is to form the unique market position of the trust company in the non-financial trust business.

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    Editor in charge: Robot RF13015

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