The process of central state-owned enterprises clearing up the equity of participating financial institutions is further accelerating.
According to the data, as of June this year, 7 such equity transactions have been liquidated, including China Shipbuilding, Anshan Iron and Steel Group, Datang Group, Huadian Group and other subsidiaries have been listed on the property rights trading platform to sell the equity of financial institutions, covering banking, insurance, securities, trust and other types of licenses. Some state-owned enterprises have even concentrated on cleaning up the equity of financial institutions, such as China Coal Group, which listed to sell its shares in China Coal Property Insurance and China Chengxin Trust in January 2024, and sold the equity of Shanxi Shanyin Rural Commercial Bank in April.
The financial business in which central enterprises participate has entered a period of contraction
In order to further strengthen the supervision and risk prevention of the financial business of central enterprises, on June 3, the Party Committee of the State-owned Assets Supervision and Administration Commission of the State Council held an enlarged meeting. The meeting believed that it is necessary to thoroughly implement the "Provisions on Accountability for the Prevention and Resolution of Financial Risks (Trial)", based on the positioning of investors, revise and improve the financial business supervision system of central enterprises, highlight the strict tone, and achieve "long teeth with thorns", angular; Consolidate the main responsibilities of enterprises, take the opportunity of inspection and rectification, continue to urge enterprises to implement rectification measures for risk problems one by one, and effectively maintain the bottom line of risks.
The meeting proposed that the increment should be strictly controlled, and the central enterprises shall not newly establish, acquire, or participate in various financial institutions in principle, and the financial institutions that serve the main industry with small effects and large risk spillovers shall not participate in and increase their holdings in principle; Do a good job in risk prevention and control, use more information technology, strive to achieve early identification, early warning, early exposure, and early disposal of risks, pursue and hold accountable those who cause major risk losses due to violations of rules or dereliction of duty, and promptly transfer clues related to violations of discipline and law to relevant discipline inspection and supervision institutions for investigation and handling.
In fact, after the 2023 Central Financial Work Conference, the financial business of central enterprises has entered a period of contraction.
In September 2023, the State-owned Assets Supervision and Administration Commission (SASAC) issued the Interim Measures for the Administration of Equity Participation in State-owned Enterprises, which proposes that, in addition to the equity participation in the strategic holding or cultivation period, SOEs should withdraw from inefficient and ineffective equity participation that has not paid dividends for more than 5 years, have long-term losses, and are not in continuous operation, and withdraw from equity participation investments that are seriously inconsistent with the responsibilities and positioning of state-owned enterprises, do not have competitive advantages, are risky, and are difficult to grasp the operating conditions.
In October 2023, the Central Financial Work Conference was held, which clearly proposed to "do a good job in the isolation of industry and finance risks". On November 6, 2023, the Party Committee of the State-owned Assets Supervision and Administration Commission of the State Council held an enlarged meeting and proposed that state-owned central enterprises should adhere to the responsibility of developing the real economy, adhere to the problem orientation, increase supervision, adhere to the return to the origin, focus on the main business, focus on the increment, effectively optimize the stock, based on the development of financial business that is in line with the characteristics of the enterprise industry and the needs of the main business, increase the proportion of financial business that provides services for the main industry, and improve the ability and level of serving the main industry.
On December 1, 2023, the special meeting of the Party Committee of the State-owned Assets Supervision and Administration Commission to promote the special governance of the inspection and rectification of central enterprises emphasized that it is necessary to focus on the "four areas", namely trust companies, financial companies, commercial factoring companies, private equity investment funds, etc., and resolutely prevent and resolve the business risks of the financial sector of central enterprises. And establish and improve a long-term mechanism to firmly guard the bottom line of no systemic risks.
In addition, in the deepening and upgrading of the reform of state-owned enterprises, the State-owned Assets Supervision and Administration Commission (SASAC) proposed three "batches" for the financial business under the industrial group, namely, "cleaning up and withdrawing a batch, optimizing and integrating a batch, and developing a batch in an orderly manner".
Central state-owned enterprises have accelerated the liquidation of the equity of financial institutions in which they have shareholdings
According to incomplete statistics, from November to December 2023, the number of sales of equity in financial institutions disclosed by central state-owned enterprises on the Beijing Equity Exchange alone reached 10. Since 2024, the clean-up process has been further accelerated, and as of June, there have been 7 cases. Subsidiaries of large state-owned enterprises, including China State Shipbuilding, Anshan Iron and Steel Group, Datang Group, Huadian Group, etc., have listed and sold the equity of financial institutions in the property rights trading platform, covering various types of licenses such as banking, insurance, securities, and trusts.
As shown in the announcement on the website of the Beijing Equity Exchange on April 15, 13.47% of the equity of Fudian Bank Co., Ltd. (hereinafter referred to as Fudian Bank) was listed and transferred on the Beijing Equity Exchange, with a reserve price of 3.204 billion yuan, and the transferor was China Datang Group Finance Co., Ltd. Some state-owned enterprises have even concentrated on cleaning up the equity of financial institutions, such as China Coal Group, which listed to sell its shares in China Coal Property Insurance and China Chengxin Trust in January 2024, and sold the equity of Shanxi Shanyin Rural Commercial Bank in April.
According to the data, among the 97 central enterprises managed by the State-owned Assets Supervision and Administration Commission, more than 70 central enterprises directly or indirectly control financial enterprises, of which more than 40 have established financial holding platforms.
Zhou Maohua, a macro researcher at the financial market department of Everbright Bank, believes that the removal of the equity of some financial institutions that contribute little to the main business of central enterprises and have a greater impact on potential risk spillover can allow central enterprises to focus on the bank, refine their main business, enhance their innovation capabilities and market competitiveness, and also help them reduce potential financial risks. The research report of the Finance and Credit Research Institute believes that the gradual withdrawal of central state-owned enterprises from the equity of some financial institutions has multiple advantages: first, it is conducive to returning to its origins, focusing on its main responsibilities and main businesses, focusing on cultivating new kinetic energy, promoting the development of strategic emerging industries, and better promoting the real economy. Second, it is conducive to optimizing its asset structure. By reducing ineffective investment, we will readjust the asset layout and improve operational efficiency and profitability. Third, it is conducive to the isolation of industry and finance risks. At present, in the context of the rising risks of some small and medium-sized financial institutions, the orderly withdrawal of central state-owned enterprises from the equity of such financial institutions will help to achieve the isolation between financial risks and the risks of real enterprises, and reduce the operational risks and pressures of enterprises.
Reviewer: Ni Mingya Editor: Wang Yin Proofreader: Ya Wenhui Producer: Li Ruoyu Signed: Peng Yong