The life and death line of 6 trillion financing business: the trust shall not be added until the pressure drop is completed

 The life and death line of 6 trillion financing business: the trust shall not be added until the pressure drop is completed

These measures include not completing the pressure reduction task, not to start new business, that is, suspension of financing business.

Year end test of trillion pressure drop index

At the end of 2019, each trust company received about 20% of the pressure drop from its own financing window.

Many trust companies have admitted to the 21st century economic report that they have indeed received specific financing pressure drop indicators, but the indicators of each company are different. The proportion of pressure drop with large balance is high and that of low balance is low.

The pressure drop ratio of 20% should be the target value of the whole industry. An executive of a trust company with the background of a central enterprise speculated to the reporter of the 21st century economic report.

What is the concept of this ratio?

There is no public data on the scale of active management financing trust. According to the statistics of the trust industry association, by the end of 2019, the balance of financing business of trust companies was 5.83 trillion yuan, an increase of 1.48 trillion yuan compared with the same period of last year, accounting for 26.99% of the total trust scale, with a year-on-year increase of 7.84%. At that time, it was also the first time in the past three years that the proportion of transaction management trusts dropped below 50%.

Roughly speaking, the scale of active management financing trust will drop by about 1 trillion yuan by pressing the reduction ratio of 20%.

In fact, in the first half of this year, the overall financing business of trust companies is still on the rise. By the end of the second quarter of 2020, the balance of financing business has reached 6.45 trillion yuan.

This may be the reason why the supervision conducted window guidance many times in the second half of the year to clarify the pressure drop indicators and increase the intensity of disposal.

The data of financing business in the second half of the year has not been released by the trust industry association. According to the data of collective trust established from January to October this year obtained by 21st century economic report reporter from the Research Institute of usufructuary financial trust, the scale of newly established collective trust financing business began to decline significantly after June. In October 2020, the scale of establishment was only 54.423 billion yuan, which was 198.71% less than that in June.

On November 25, the market rumors that about 40 trust companies (68 in total) in China immediately suspended financing business, and the recovery time is uncertain.

A relevant person of a trust company who did not respond positively said that the accurate statement of the window guidance should be no additional pressure drop is allowed if the pressure drop is not completed.

Some industry insiders told reporters of the 21st century economic report that some companies failed to meet the pressure drop targets, and the purpose of the suspension was to let them implement the previous regulatory requirements and ensure that the pressure drop was in place before the end of the year.

At the end of 2019, at that time, the industry was putting pressure on the channel business and controlling the balance of real estate trust business.

At the end of 2019, Huang Hong, vice chairman of the China Banking and Insurance Regulatory Commission, pointed out at the annual meeting of China Trust industry that individual trust companies have carried out a large number of high-risk non-standard financing business by concealing the true investment direction of funds through nesting layer by layer. Although the companies and executives have obtained short-term benefits, they have damaged the investors right to know and interests.

In March 2020, the local CBRC conveyed the trust supervision requirements of 2020 to the trust companies in their jurisdiction, including: continue to compress trust financing business with shadow banking characteristics, and formulate financing trust compression plan. According to the securities times, according to the regulatory authorities plan at the beginning of the year, the industry will drop 1 trillion yuan of financing trust business with the characteristics of shadow banking by 2020.

The draft of new rules for fund trust brings a heavy blow to the non-standard business of trust companies once again. In May this year, the Interim Measures for fund trust management of trust companies (Draft for comments) introduced the non-standard proportion limit for the first time, in which the collective fund trust plan limits the proportion of non-standard business scale of a single entity to net assets by 30%. According to the industry calculation, with the average net assets of the industry at the end of 2019 as the base, and under the constraint of 30% ratio, the scale of loans or other non-standard bond business between trust companies and single entities cannot exceed 3 billion yuan.

On June 24, the CBRC issued the key points of looking back to rectify the disorder in the banking institutions market in 2020, which listed the financing trust business separately, and asked to focus on the phenomenon of failing to formulate and effectively implement the financing trust business compression plan according to the regulatory requirements in this business.

The indicators issued by the supervision include channels, financing and non-performing assets, which are the overall requirements for the healthy development of the industry. The regulatory requirements are very clear, so that we can operate in accordance with the law. The general manager of the above trust company told the reporter of the 21st century economic report.

During the year, several trust companies were reported

Why does financing business get here?

According to the classification of Trust Industry Association, the financing business of trust covers multiple dimensions. Among the traditional businesses, some are invested in industrial and commercial enterprises, financial institutions, infrastructure and real estate; in innovation business, asset securitization and consumer finance are also included in the financing business.

At the end of the fourth quarter of 2017, the scale of financing business was 4.43 trillion yuan, and the scale of transaction management business was 15.65 trillion yuan. Since then, the scale of transaction management business has been reduced, and the scale and proportion of financing trust business began to increase significantly.

At the beginning of this year, Jin Yu, general manager of the strategic research department of Zhongcheng trust, pointed out that the reasons for the increase in the scale and proportion of financing trust in the past two years mainly include macro-economy, policy regulation, industry supervision and the inertia of trust companies in pursuit of short-term performance.

Specifically, due to a certain decline in macroeconomic growth in recent two years, the pulling role of investment in economic growth is more important, and the scale of financing business in areas with obvious investment pulling effect, such as infrastructure construction, has a rapid growth; the de leverage policy objectively has a certain impact on the liquidity of some industries and fields, leading to the limitation of bank loans of some enterprises and credit With the increasing demand for entrusted financing, the proportion of trust funds in the field of industrial and commercial enterprises has continued to occupy the first place in recent years, which can also reflect this point. Since 2018, the efforts to rectify the chaos in the industry have been continuously strengthened, and the channel business scale has been continuously compressed and achieved obvious results. In the past, part of the channel business has been transformed into the financing business actively managed by trust companies, which has objectively caused financing The proportion of asset trust business has increased; although the macroeconomic growth is in the decline stage, most of the trust companys shareholders requirements for the growth of performance indicators have not changed. Under the situation that the channel business is reduced and the transformation and innovation business is difficult to bring enough short-term income, trust companies generally increase the strength of financing business to meet the performance requirements.

A number of insiders have analyzed to the 21st century economic report that the reason why financing business has attracted regulatory attention and suffered pressure drop in 2020 is that trust channels are very flexible, and they are closely connected with banks and other financial institutions. Controlling the scale of financing trust may be conducive to controlling potential financial risks such as real estate and government debt. Moreover, in recent years, the risk events exposed by Anxin trust, Sichuan trust and Huaxin trust all come from this business, and the risk exposure is relatively large, which has attracted the attention of the regulatory authorities.

He Jinyu pointed out in the above research article that, generally speaking, the risk of the trust industry is mainly the risk that the financing Party of the financing trust project fails to pay the interest and repay the principal on time, which leads to the failure to distribute the trust benefits to the beneficiaries according to the contract. Therefore, the obvious growth of trust risk assets has certain internal relationship with the development speed of financing trust, especially in the reverse of economic growth slowdown In the cycle stage, the financing risk in the financial market will generally increase, but the level of risk management and risk tolerance of trust companies does not match the development speed of financing trust.

In June 2020, the CBRC defined the financing business. The broad sense of financing trust includes both channel financing trust business and financing trust business actively managed by trust companies.

The regulation also made it clear that the financing businesses that need to be focused on this time mainly include two aspects: one is that all kinds of financial institutions use trust channels to carry out regulatory arbitrage and evade policy restrictions; the other is that trust companies deviate from the trustees position and regard themselves as credit intermediary, and the risk is actually borne by trust companies, which are carried out in violation of laws and regulations. To reduce the illegal financing trust business is to gradually reduce the overall risk of the trust industry.

The CBRC said that the transformation and development of trust companies is a gradual process, and it will be a continuous work to reduce the illegal financing trust business. Therefore, the regulatory policy will not stop the trust companies from carrying out financing trust business, but gradually reduce the scale of illegal financing business and promote its optimization of business structure until the trust company can rely on the original business to support its operation and development.

(author: Zhu yingzi, editor: Ma Chunyuan)

This article is from Wang Xiaowu, editor in charge of economic report in the 21st century_ NF