But the stock pledge business seems to be the home of the head securities companies. According to wind, in terms of the number of transactions in this business in the year, Haitong Securities ranked first with 291 transactions, followed by Guotai Junan, CITIC Securities, CSCI, China Merchants Securities, Galaxy Securities, etc., with more than 100 transactions. Western securities, Guorong securities and Kyushu securities have less than five sporadic transactions.
In the second half of last year, the risk of stock pledge has been controlled, but some small and medium-sized securities companies still take risks to engage in high-risk business, are they active or passive? Industry insiders believe that this is the situation, but also driven by profits.
There is a lot of pressure on assessment. Small and medium-sized securities companies are forced to walk the tightrope and do not wear safety belts when they do equity pledge business. Wang Li (pseudonym), an insider of a large brokerage in Beijing, told reporters.
10% of revenue in the first half of the year
Shortly after the listing of one year old, the warning letter about the equity pledge business was placed in front of Nanjing Securities. In the first half of this year, the business contributed nearly 10% of its revenue and more than 16% of its interest income.
According to wind, the number of equity pledge transactions of Nanjing Securities has been 34 so far this year, with a total of 298 million shares pledged and a reference market value of 2.718 billion yuan, of which 31 transactions and a total of 279 million shares have not been released. Among 106 securities companies that carry out relevant businesses, the total number of transactions ranked 30.
At the same time of ranking higher in the number of transactions, the benefits of equity pledge business are also obvious.
According to the semi annual report of Nanjing Securities this year, the company achieved revenue of 1.002 billion yuan in the first six months, a year-on-year increase of 57.32%; the net profit attributable to the parent company was 384 million yuan, a year-on-year increase of 105.99%. By the end of June, the balance of stock pledge repurchase business was 2.6 billion yuan, an increase of 5.15% over the beginning of the reporting period, and the interest income was about 88.4871 million yuan, an increase of 36.42% year on year, accounting for 16% of the total interest income in the first half of the year.
Not only that, Nanjing Securities has increased the specific action of the business. In the fixed increase plan of no more than 6 billion yuan issued by Nanjing Securities in early August, it is planned to use no more than 2.5 billion yuan to expand the capital intermediary business, involving the two financing and stock pledge type repo business.
However, on September 12, a month later, Nanjing Securities was named by Jiangsu securities regulatory bureau for problems such as risk control and inadequate fund management in the pledge style repo business.
In the process of carrying out stock pledged repo transactions, the company has problems such as insufficient due diligence on the access of the participants and imperfect management of the financing funds. As for the problems existing in the equity pledge business of Nanjing Securities, the Shanghai Stock Exchange issued a letter of intent for disciplinary action on October 8.
In terms of specific penalties, the SSE shall suspend the relevant authority of stock pledged repo transaction (limited to newly added initial transaction) for three months, i.e. from November 30, 2019 (inclusive) to February 29, 2020 (inclusive), no newly added initial transaction of stock pledged repo transaction shall be allowed. The decision on disciplinary action issued by Shenzhen Stock Exchange also pointed out the problems existing in the development of Nanjing Securities, and also decided to suspend the trading authority of stock pledge repurchase for three months.
The market estimates that this may make Nanjing Securities bear tens of millions of yuan of income loss. At the same time, classification rating may be affected, which in turn will affect the scale and cost of business development.
According to the reporter, up to now, due to the equity pledge business, brokerage companies such as Orient Securities, Western securities, Northeast Securities, Shanxi securities, and Guohai Securities have announced asset impairment, and the provision for asset impairment has exceeded 1 billion yuan.
Data source: wind information
The equity pledge business is not just hot potato, but also brings considerable profits to the securities companies. Nanjing Securities has enjoyed the advantages in the equity pledge business.
According to the operation data of the first half of 2019 calculated by the China Securities Association, the interest income of equity pledge of 92 securities companies in the first half of 2019 was RMB 18.959 billion, down 21.52% year-on-year. However, in this context, there are still 14 securities companies with a year-on-year increase of equity pledge interest income of more than 30%, including Nanjing Securities.
Although there are frequent risks, small and medium-sized securities companies are still frequently involved, and profit is the main driving force.
When we do the business of stock pledge, we can make money when the risk is controllable. There are also risks for large securities companies, which is a question of proportion and probability. However, in the overall environment of last year, the liquidity of private enterprises contracted, the market fell, and the risk broke out in a certain range. Therefore, we should be more cautious about individual bonds and liquidity. Chief non bank analyst of a medium-sized securities firm in Beijing told reporters.
In terms of business classification, the equity pledge business is divided into the credit transaction business in the securities brokerage business, and the margin trading business is on the same side. The capital source of securities companies engaged in equity pledge business, on the one hand, is their own capital, on the other hand, is the capital management plan, and most of the capital of the capital management plan comes from the bank.
But at the end of last year, after the risk of equity pledge broke out in an all-round way, the securities companies became more and more cautious about the establishment of the asset management plan to invest in stock pledge, and the power of the bank to lend money became less and less.
In addition to the above profit factors, the insiders believe that securities companies take risks are more passive choices of no other options. Wang Li said that the source of the problem has been buried.
A good ticket is that the ticket with no risk of falling stock price has been taken away by large companies; secondly, the large securities companies give a 30-40% discount, while the small and medium-sized securities companies give a 50-60% discount. The risk is high from the beginning. He mentioned.
The space for small and medium-sized securities companies to actively choose is small. Comparatively speaking, the equity pledge business makes a lot of money and comes quickly.
The risk is high, but it has to be done. Many small and medium-sized securities companies are not comprehensive securities companies, or just have licenses, and other businesses can not do it. For example, if the two financing businesses are linked to the capital fund and the capital fund is less, the rate of margin trading will be higher than that of others. Wang Li said.
Industry concentration will further increase
The above-mentioned non-bank analysts believe that the core risk of equity pledge does not come from the new risks in the past two years, but shows the characteristics of gradual accumulation.
The scale of large securities companies is large, but the risk control requirements for individual securities are also higher. Small and medium-sized securities companies are hard to have a great advantage in terms of capital, so they are doing more in risk control and credit. There have been more private enterprises, and the accumulated risks will be greater. The above non bank analysts said.
However, the risk of equity pledge in the whole market has been well controlled. According to the calculation of Founder Securities, if the market drops 10% to 2497.28, the pledge risk will not worsen to the end of 2018. Among them, the digestion of equity pledge projects of securities companies is the main contributor to the obvious decline of the total scale and risk scale of pledge this year. It seems that the life of small and medium-sized securities companies will be more difficult. The capital of the top securities companies is abundant and the policy tendency is more and more obvious. The CSRC said at the end of November that it would actively promote the building of aircraft carrier level head securities companies and promote the securities industry to become bigger and stronger. The above-mentioned non-bank analysts believe that in the context of foreign securities companies entering China, domestic securities companies still need to improve their strength in derivatives, pricing and other aspects, while small and medium-sized securities companies will bear greater pressure in the industry reshuffle. Source: First Financial Editor: Guo Chenqi, nbj9931
However, the risk of equity pledge in the whole market has been well controlled. According to the calculation of Founder Securities, if the market drops 10% to 2497.28, the pledge risk will not worsen to the end of 2018. Among them, the digestion of equity pledge projects of securities companies is the main contributor to the obvious decline of the total scale and risk scale of pledge this year.
It seems that the life of small and medium-sized securities companies will be more difficult. The capital of the top securities companies is abundant and the policy tendency is more and more obvious.
The CSRC said at the end of November that it would actively promote the building of aircraft carrier level head securities companies and promote the securities industry to become bigger and stronger. The above-mentioned non-bank analysts believe that in the context of foreign securities companies entering China, domestic securities companies still need to improve their strength in derivatives, pricing and other aspects, while small and medium-sized securities companies will bear greater pressure in the industry reshuffle.