In 2023, China's trust industry will face multiple challenges and changes. In the complex and volatile market environment, AVIC Trust Co., Ltd. (hereinafter referred to as "AVIC Trust") will enter a critical stage of "improving quality and efficiency and reshaping the pattern" in 2023.
On April 30, AVIC Trust released its 2023 annual performance report. During the reporting period, AVIC Trust achieved a total operating income of 1.237 billion yuan, a net profit of 83.8671 million yuan, a net income of 1.770 billion yuan from the main business of the trust, and a total scale of trust assets of 635.650 billion yuan. The company's overall operation is stable and its asset quality is good.
2023 is a year of historic significance for China's trust industry, with the implementation of the new three classifications, the trust industry has officially put an end to the creation and issuance of non-standard products, and trust companies will continue to withdraw from the positioning of quasi-credit in the next three years to truly achieve the goal of returning to the origin.
Under the guidance of the regulatory policies of the trust industry, AVIC Trust has actively optimized its business structure and transformed its growth momentum. Closely focusing on major national strategies, improving the efficiency of financial services, vigorously developing standard trusts, and continuously increasing the scale and proportion of investment in the securities market and financial institutions.
AVIC Trust adheres to the working tone of "seeking progress while maintaining stability", takes "high-quality development" as the core theme, adheres to the bottom line of no systemic risks, promotes the return of business to the origin of trust, and achieves steady performance growth and in-depth promotion of strategic transformation.
Explore Service Trusts
With the implementation of the "three classifications", the scale and profits of the trust industry have declined, resulting in the transformation of the industry has become a necessity. Service trust has become a key business for the regulatory authorities to guide trust companies to return to their origins and transform and develop, and trust companies have actively developed service trusts based on their own resource endowments and practical experience.
In addition to asset securitization service trusts and family trusts, trust companies have actively deployed other innovative service trust businesses, such as stakeholder fund management trusts, enterprise bankruptcy and reorganization trusts, and enterprise bankruptcy liquidation trusts.
In order to further play the "service" function and mission of the trust, AVIC Trust has carried out multi-field practice and multi-scenario exploration in asset service trust, and has played an active role in helping the aviation industry, supporting green development and serving people's livelihood.
In order to better help the aviation industry chain extend, supplement and strengthen the chain, and fulfill the primary responsibility of strengthening the army, in December 2023, AVIC Trust launched the industry's first supply chain financial administrative management service trust, giving full play to the advantages of the trust system and providing strong support for the sustainable development of the aviation industry chain and aviation technology innovation. In this project, the military enterprise and AVIC Trust launched the "Supplier Joint Support Program", with AVIC Trust as the trustee of the service trust. On the premise of ensuring information security, through cooperation with custodian banks, we can achieve multiple purposes such as capital security, create more independent, efficient and safe business value, and create conditions for suppliers to receive investment and financing support from the financial market in the future. Compared with the traditional financing model, the service trust model has significant advantages.
In the application scenario of serving the society, AVIC Trust successfully landed the industry's first smart parking building administrative management service trust. In this business, AVIC Trust, as an independent third party, provides administrative management services such as operation custody, account management, transaction execution, share registration, accounting valuation, fund clearing, execution supervision, and information disclosure for the construction, operation and exit of smart parking buildings.
Under the new regulations of "three classifications", trusts have a broader space for business, and asset service trusts have become an important bridge for trusts to realize "finance for the people", promoting the two-way development of trusts and people's better life.
Practice the path of philanthropy
As a unique financial instrument, trusts are playing an increasingly important role in philanthropy. According to the "2023 China Charitable Trust Development Report", as of the end of 2023, the cumulative number of charitable trusts in mainland China has reached 1,655, with a cumulative filing scale of 6.52 billion yuan, showing a steady development trend and showing diversified characteristics.
Under the dual mission of financial and social responsibility, AVIC Trust actively participates in the charitable trust business. In 2023, AVIC Trust will record 10 new charitable trusts, with a new filing scale of 82,981,947 yuan, and a total of 44 charitable trusts filed over the years, with a total scale of 234,365,000 yuan. In 2023, more than 60 million yuan will be spent on charity, covering areas such as poverty alleviation, rural revitalization, medical assistance, assistance to the disabled and the elderly, education support, cultural construction, disaster relief, ecological protection, etc.
In 2023, AVIC Trust, ICBC Private Bank and China Charity Federation jointly released the first charitable trust based on the Donor's Advised Fund (DAF) model in China, version 2.0 of "Junzi Partner Charitable Trust". The charitable trust is provided by the China Charity Federation as the settlor (the funds are donated by ICBC's private banking customers), AVIC Trust is the trustee, and ICBC Private Bank provides comprehensive advisory services.
In addition, in April 2023, AVIC Trust launched the "Great Love Yuexin Charitable Trust", which is used to support mental health education and care for single mothers, improve the professional quality of psychological counselors and support related courses, help other people with psychological counseling needs and other public welfare activities in line with the provisions of the Charity Law, making it the first charitable trust in the market to focus on single mothers. The first trust assets of the trust are cash assets, which will be further added in the future. In addition to acting as the trustee, AVIC Trust will also assist the settlor in screening the investment targets, application methods, investment amounts, conditions, and deadlines of the trust property from the perspective of asset allocation, form investment suggestions, give full play to the professional advantages of financial institutions, and help the charitable trust maintain and increase its value.
In November 2023, the "AVIC Trust, CITIC Bank, Huangxi Culture and Art Charitable Trust" was officially established, which was entrusted by Mr. and Mrs. Huang Zhong and Gong Meile to be established, with AVIC Trust as the trustee, China CITIC Bank as the agent and recommender, and CNCBI Wealth Management as the investment advisor. This charitable trust inherits and carries forward the spirit of Mr. Huang Xi in inheriting traditional Chinese culture, and further promotes the promotion of traditional culture through charitable trust to support the operation of museums, cultural and artistic research, teaching, exhibitions, etc.
Since the establishment of the first charitable trust in September 2016, AVIC Trust has actively leveraged its trust advantages to help the development of philanthropy. In recent years, AVIC Trust has provided charitable trust services in multi-scenario applications around the various needs of customers in the process of participating in charity, including the difficulty in screening charitable projects, the sustainability needs of charitable accounts, the needs of love collection under specific purposes, and the use of diversified assets for charity. With its active practice in the field of charitable trusts, AVIC Trust has won a number of honors.
Creating a "Second Growth Curve"
In recent years, net-worth products have become an important direction and support point for the transformation of trust companies, and AVIC Trust has complied with regulatory guidance, grasped market trends, deeply cultivated standard trust business, and created a "second growth curve" of asset management with trust characteristics.
AVIC Trust disclosed in its annual report that it has built a series of "Dimensity" standard trust product lines, including short-term open-ended products, fixed income products, equity investment products, fixed income + products, etc., with a management scale of more than 150 billion yuan. At the same time, the company continued to consolidate the professional investment and research team, increased investment in system construction, and built an investment and research platform for asset management business with systematic investment research, automated risk control, online services and intelligent data with the help of science and technology.
It is reported that AVIC Trust's "Dimensity" series of standard products has been established for 11 years. Its name is taken from the third "Lu Cun Star" of the Big Dipper, which represents wealth. In the name of "Tianji", AVIC Trust has created a complete standard trust product system. The "Dimensity" series of standard trusts cover short-term open-end products, fixed income investment products, fund of funds (TOF), stock investment products, fixed income + products, etc., to meet the diversified risk appetite and target rate of return of investors.
In the context of regulatory guidance and the acceleration of the active management transformation of the trust industry, the standard trust business is one of the subdivided transformation tracks that trust companies focus on. According to the statistics of the usufruct trust network, the number of standard trusts issued in 2023 will be 13,224, an increase of 10.19% over 2022, and the issuance scale will be 253.33 billion yuan, a significant decrease of 58.5% compared with 2022 due to the adjustment of the capital market.
From the perspective of asset allocation, combined with the experience advantages of traditional non-standard products of political and credit products that have been cultivated for many years, after the transformation of standard products, fixed income assets such as bonds are still the main allocation direction of standard trusts, especially under the adjustment of the stock market in 2022-2023, the proportion of fixed income standard trusts will continue to maintain a fluctuating upward trend. According to the statistics of the usufruct trust network, in 2023, the establishment scale of fixed income in standard trusts will be 233.035 billion yuan, accounting for 91.99%; The total establishment scale of bond strategic trust products is 221.958 billion yuan, accounting for 87.62% of the issuance scale of standard trusts in 2023.
In 2023, the trust industry has undergone a number of major changes, and with the official implementation of the new regulations on the classification of trust business and the differentiated regulatory policies for trust companies, the industry is in a critical stage of "improving quality and efficiency, and reshaping the pattern". In 2024, with the change of new and old production capacity and the fluctuation of the economic cycle, the trust industry will adhere to the general tone of "seeking progress while maintaining stability, promoting stability with progress, and establishing first and then breaking down", open a new situation in the changing situation, and further provide differentiated financial services based on the origin of trust and the advantages of institutional functions.