Non performing rate of inherent assets exceeds 20%
In late May, 66 of the 68 trust companies in China have disclosed their 2019 annual reports. The disclosed annual report data shows that in 2019, the overall operation of the trust industry is in good condition, with steady growth of operating revenue and obvious narrowing of net profit decline.
According to the research report issued by Yunnan trust, 66 trust companies in China achieved a total operating revenue of 114.344 billion yuan in 2019, an increase of 11.89% compared with 102.191 billion yuan in 2018. Among them, the total income of trust business is 81.133 billion yuan, up 5.4% compared with 76.952 billion yuan in the same period of 2018; the total income of inherent business is 33.237 billion yuan, up 31.69% compared with 25.239 billion yuan in the same period of 2018.
In terms of net profit, 66 trust companies achieved a total net profit of 53.664 billion yuan in 2019, a slight decrease of 1.61% compared with 54.541 billion yuan in the same period of 2018. However, compared with the year-on-year growth of - 13.80% in 2018, the decline rate of net profit slowed down.
At the same time, the asset quality of trust industry is still under pressure. According to the data provided by usufruct trust, in 2019, at least six trust companies including Huachen trust and COFCO trust had an inherent asset non-performing rate of more than 20%. However, as many as 18 trust companies have maintained a zero non-performing rate.
The use of the inherent assets of the trust company includes currency, loan, long-term equity investment, etc. the allocation of the inherent assets can also reflect the asset management ability of the trust company to a certain extent. In an interview with Securities Daily, Xie Yunbo, researcher of the postdoctoral workstation of Bairui trust, said that on the one hand, some assets, especially loan assets, may expose new risks and improve the rate of non-performing inherent assets under the great downward pressure of economic growth; on the other hand, although the inherent assets and trust assets of the trust company are independent of each other Although managed separately, the inherent assets are still mitigating the risks of trust projects and playing an important role in providing support for trust business. The accelerated exposure of trust risk projects in 2019 may have a certain impact on the improvement of the non-performing rate of inherent assets.
How to optimize the quality of inherent assets? Xie Yunbo believes that, on the one hand, trust companies should focus on improving risk control level to improve the quality of incremental assets from the source; on the other hand, trust companies should increase the disposal of risk assets and optimize the quality of stock assets.
Current priorities of Chengxin trust
In 2019, the trust project risks are further exposed. According to the data released by China Trust Association, by the end of the fourth quarter of 2019, the scale of risk assets in the trust industry was 577.047 billion yuan, an increase of 354.86 billion yuan or 159.71% compared with the end of 2018; the number of risk projects in the trust industry was 1547, an increase of 675 compared with the end of 2018; the rate of risk assets in the trust industry increased from 0.98% in 2018 to 2.67% in 2019.
In this regard, Zeng Gang, director of the national finance and development laboratory, analyzed that in 2019, the main reason for the significant increase in the scale of risk projects and risk assets in the trust industry was that the regulatory authorities increased the strength and frequency of risk screening, so that the previously hidden risks were more fully exposed, which did not mean that the incremental risk increased rapidly. With the full exposure of risk, it is expected that the change of the scale of trust risk assets will tend to be stable, and the overall risk of the industry will gradually move from divergence to convergence. Under the background of sufficient risk exposure, stock risk resolution will become an important task for the trust industry. From the perspective of the risk resistance ability of the trust industry itself, the industry risk is still within the tolerable range.
In 2019, the trust industrys asset quality has been under great pressure, and this years epidemic situation has intensified this momentum. In addition to operating pressure, the situation of trust project risk prevention and control is more severe.
Affected by the epidemic, the operation of some trust project counterparties may face greater difficulties, and the risk of some trust projects may be further improved. Xie Yunbo told the Securities Daily that in terms of project risk prevention and control, on the one hand, trust companies should adhere to a high level of risk control policy, do a good job in project coordination, and promote the implementation of the project on the premise of meeting the companys risk control policy; on the other hand, trust companies should adhere to the provisions of various regulatory policies, for example, through capital pool, related party transactions, etc In addition, in the process of project existence, trust companies should strengthen the monitoring of the operation and financial situation of the counterparties, identify potential risks in time, and intervene in the process of risk prevention and resolution as soon as possible.
Source: responsible editor of Securities Daily: Yang qian_nf4425