"China Huarong is still one step away from officially changing its name"
On January 19, the official website of the State Administration of Financial Supervision and Administration issued a reply on the name change of China Huarong Asset Management Co., Ltd.:
1. Agree to change your company name to: Chinese name "China CITIC Financial Asset Management Co., Ltd.", English name "China CITIC Financial Asset Management Co., Ltd.".
2. Agree to change the Chinese names of your company's 33 branches.
3. Your company and relevant branches should renew the new financial license from the issuing authority within 10 days from the date of receipt.
4. Your company and its relevant branches shall go through the statutory change procedures in accordance with the relevant regulations, and report to the State Administration of Financial Supervision or its dispatched agencies in a timely manner as required.
Branch Change Details:
The approval of the State Administration of Financial Supervision means that China Huarong is one step closer to the final official name change, and finally only needs to be approved by the State Administration for Market Regulation, and the whole process is completed.
On November 15, 2023, China Huarong issued four announcements in a row to shake the non-performing asset industry: China Huarong will change its name to "China CITIC Financial Asset Management Co., Ltd." and replace it with the emblem of CITIC Group; spend HK $13.6 billion to acquire 5.01% of CITIC shares; CITIC Group will send a talent with investment banking background to serve as vice president of China Huarong; complete the transactions of Huarong Consumer Finance, Huarong Securities, Huarong Zhongguancun CITIC and Huarong Trust, The transfer of 5 financial licenses of Huarong Xiangjiang Bank achieved a profit of 9.2 billion yuan.
So far, China Huarong's "blood exchange" action has been basically completed.
"Huarong" will become history, deeply buried in the memory of several generations of non-performing asset owners. At the same time, Cinda, Dongfang, and Great Wall are also in the process of changing investors, and the four major AMCs have gone their own way, but after all, they have the same path and their mission has not changed.
Retain "China" and add "AMC" to the English name
China Huarong wants to change its name and change the company emblem in the non-performing assets industry, but it is easier for everyone to think of adding the word CITIC in front of Huarong, which is "CITIC Huarong", but as soon as Huarong announced it, to everyone's expectation, the word "Huarong" disappeared directly.
"Huarong represents history, but it's all in the past now!" said an insider close to Huarong, "This new name is difficult to apply, especially with the prefix 'Zhong', and it is even more difficult to add the word 'finance'." ”
According to the announcement, China Huarong intends to change the full name, abbreviation and emblem of the company in Chinese and English. Specifically, the full name of the Chinese name will be changed to "China CITIC Financial Asset Management Co., Ltd.", referred to as CITIC Financial Assets, and the full name of the English name will be changed to "China CITIC Financial Asset Management Co., Ltd.", referred to as CITIC Financial AMC.
Financial asset management company is the legal and administrative definition of the five major AMCs, so CITIC Group directly crowned the word "finance" in it, and ended with "AMC" in the English abbreviation. Compared with "China Huarong", "CITIC Financial Assets" has more attributes and characteristics of non-performing asset industry institutions, which shows the strong strength and profound background of CITIC Group, as well as its determination to reborn Huarong.
In addition to changing the name of Huarong, it is also necessary to let Huarong integrate more deeply into CITIC Group. As a result, CITIC Shengxing, a wholly-owned subsidiary of CITIC Group, entered into a share transfer agreement with China Huarong to transfer 5.01% of the issued shares of CITIC for HK$13.627 billion. Upon completion of the acquisition, China Huarong will hold 5.01% of the issued and outstanding shares of CITIC Shares.
In addition, CITIC Group also sent Xu Jiongwei, chairman of China Securities Construction Investment, to serve as vice president of Huarong. So far, Huarong's management has completed a "big change". Liu Zhengjun, member of the Party Committee and Deputy General Manager of CITIC Group, was appointed as Chairman, Li Zimincheng, who was also Chairman of CITIC Trust and Chairman of CITIC Tourism Group, was appointed Executive Director and President, and Zhu Wenhui and Wen Jinxiang of CITIC Group were appointed as Vice Presidents, Chief Financial Officer and Secretary of the Board of Directors.
"The new vice president has rich experience in investment banking and is very young, and Huarong should be very excited about the current business transformation of the four major AMCs. Industry insiders said. It is understood that the 48-year-old Xu Jiongwei graduated from Fudan University with a bachelor's degree in economics and joined the investment banking department of Huaxia Securities after graduation. In December 2005, Xu Jiongwei joined the investment banking department of China Securities Construction Investment Co., Ltd., and since October 2019, he has served as the chairman of China Securities Construction Investment Co., Ltd., a wholly-owned subsidiary of China Securities Construction Investment.
"These are all good things, which shows that CITIC Group fully supports Huarong. Insiders close to Huarong said.
Turn a new chapter
In 2018, many of Huarong's businesses were in a state of stagnation and conservativeness. The 2019 annual report dystocia activated the valve for the liquidation of its risk assets. Since 2019, the provision of asset impairment losses has exceeded 200 billion yuan, which is the first thing to be completed after CITIC Group enters the station.
In the first half of 2023, Huarong acquired nearly 50 billion yuan of non-performing asset debt packages in the open market, accounting for 37%, ranking first, and as of the end of September, the scale of newly acquired debts exceeded 80 billion yuan, a year-on-year increase of 119%, continuing to maintain its leading position in the market.
Since joining CITIC Group, relying on the comprehensive advantages of the group, Huarong has created a model of "industry-finance synergy to bail out and reduce risks", and has implemented 45 collaborative projects since the beginning of this year. For example, Huarong cooperated with CITIC Trust and other units to successfully implement the Sunac Shanghai Dongjiadu bail-out project to revitalize assets, Huarong Rongde and CITIC Group members successfully implemented the "guaranteed delivery building" project of Brilliance Real Estate invested by common benefit bonds, and local branches also cooperated with CITIC Group's subsidiaries to support the reform of state-owned enterprises and the bailout of private enterprises.
On November 16, Huarong also notified the transfer of subsidiaries, up to now, it has completed the equity sale of five licensed subsidiaries including Huarong Zhongguancun Non-performing Assets Trading Center Co., Ltd., Huarong Consumer Finance Co., Ltd., Huarong Securities Co., Ltd., Huarong Xiangjiang Bank Co., Ltd., and Huarong International Trust Co., Ltd., with a consolidated statement of about 3.5 billion yuan (about 9.2 billion yuan at the parent company level).
At present, the only direct subsidiaries of Huarong are Huarong Financial Leasing, Huarong International, Huarong Rongde and Huarong Industrial. On November 2, the State Administration of Financial Supervision approved the change of the registered capital of Huarong Financial Leasing from 5.927 billion yuan to 12.564 billion yuan. After the capital increase, Huarong is still the largest shareholder, holding 79.92% of the shares.
The end of an era in the non-performing asset industry
In 2018, Lai Xiaomin's fall ended the era of the four major AMCs running wild with their eyes closed. In order to prevent similar incidents from happening again, the vice presidents of the four major AMCs began to implement a rotation system.
Lai Xiaomin's case is the largest financial corruption case since the founding of the People's Republic of China, and Lai Xiaomin, who embezzled 1.788 billion yuan, became the first economic criminal to be executed since the 18th National Congress of the Communist Party of China. This shows the severity of its social impact and the enormous economic losses it has brought to the country. Some people believe that it changed the fate of Huarong, thereby changing the fate of the four major AMCs. However, objectively speaking, the four major AMCs are new things for the mainland, and after completing the historical mission of divesting the 1.4 trillion non-performing assets of the four major banks, they need to explore the way for their own commercial transformation, and there is no experience to learn from.
From the beginning of China Cinda's creation of the attached restructuring business to the gradual expansion of the financial holding empire of the four major AMCs through policy-based acceptance of risk financial institutions, this is all crossing the river by feeling the stones, and we do not know the outcome and right or wrong, so we cannot judge the development history of the four major AMCs from the perspective of God.
In 2020, the fifth largest AMC Galaxy asset license was approved, ending the oligopoly era of Cinda, Huarong, Dongfang, and Great Wall;
In 2022, CITIC Group's acquisition of Huarong ended the era of the integration of the four major AMC investors and supervisors.
In 2023, the third commercialization transformation of national AMCs will be ushered in, and the other three AMCs will also change hands to new owners, and China's non-performing asset industry will enter a new era.
Author: Distressed Asset Headlines