On May 15, 2024, the China Trust Association held the "2023 China Trust Industry Development Evaluation and Analysis Conference" in Beijing.
According to the data of the China Trust Association, as of the end of the fourth quarter of 2023, the balance of trust assets was 23.92 trillion yuan, an increase of 1.28 trillion yuan from the end of September, a month-on-month increase of 5.65%, an increase of 2.79 trillion yuan from the same period last year, a year-on-year increase of 13.17%, and a significant increase of 5.7 percentage points from the end of the third quarter. According to the data of China Trust Registration Company, from June to December 2023, a total of 30,415 trust products were established in the trust industry, with an establishment scale of 4,332.505 billion yuan.
Relevant data show that the business structure of trust companies has been continuously optimized, which is manifested in the following ways:
Performance 1: Focus on the development of wealth management service trusts to serve the people's better life.
According to the data of China Trust Registration Company, from June to December 2023, among all 25 business types, the number of establishments of insurance trusts, family trusts, family service trusts, and wealth management trusts of legal persons and unincorporated organizations were all in the top 5.
In 2023, the trust company will vigorously develop family trusts and family service trusts, promote family asset planning, realize the appreciation, preservation and inheritance of wealth, develop insurance trusts, special needs trusts, etc., and try to provide customers with full-life cycle trust services, focusing on customer needs and risk and return preferences, relying on their own professional advantages to build a competitive product line, and create more property income for the people while serving the high-quality development of the real economy.
After 10 years of exploration, wealth management service trust has become one of the driving forces for future development.
First, family trusts are gradually maturing. 2013 is known as the first year of family trusts in China. Up to now, about 59 trust companies have carried out family trust business, with a total scale of about 500 billion yuan. The specific manifestation is: head effect. Among the top 10 trust companies, the scale of family trust business accounts for 90% of the total scale of the industry, reaching 300 billion yuan; Channels are king. Bank-based trust companies have the fastest scale, and by the end of 2022, the scale of existence has reached 100 billion yuan. Mainly due to the bank's branches, over-the-counter transactions and strong customer base; The eight immortals crossed the sea, each showing their magical powers. Non-bank trust companies establish corresponding channels according to the background of their respective shareholders, and of course, some trust companies develop their own wealth management. Due to the fact that the trust company has no branches, its development is slow.
Second, family service trusts continue to explore. As of the end of 2022, a total of 12 trust companies have landed family service trusts, with an existing scale of 2.7 billion yuan. In 2023, about 15 trust companies will issue the first family service trust service products, and in September 2023 alone, 5 trust companies, in cooperation with securities companies and fund companies, will issue the first family service trust products in different scenarios. The difficulty lies in the construction of service scenarios, financial technology empowerment, and professional training.
The third is the continuous innovation of insurance trusts. After 8 years, the scale of insurance trust trust has continued to increase, and about 30 trust companies provide insurance trust services, the business model has been continuously iterating, and the enthusiasm of insurance companies to participate has been rising.
Taking CITIC Trust as an example, it has been deeply engaged in the field of wealth management service trusts for 9 years, and family trusts and insurance trusts have been at the leading level in the industry in multiple core dimensions such as trustee scale, number of customers, and innovative services. For entrepreneurs, focusing on the four dimensions of "people, family, enterprise and community" advocated by CITIC Financial Holding's "CITIC Entrepreneur Office", we have created a comprehensive family office service system based on the trust structure; Actively implement the new guidelines for the classification of trust business, and promote the development of family service trusts, special needs trusts, other personal wealth management trusts, and wealth management trusts for legal persons and unincorporated organizations.
Although the wealth management business is in a stage of rapid growth, the trust company's wealth management service trust is still in the exploratory stage, and there are still many constraints, such as the imperfect supporting system, the comprehensive service capacity of the trust company needs to be improved, and the trust culture and wealth inheritance culture are still being established.
Performance 2: Continue to develop asset management trusts and provide more asset options.
The Sixth Central Financial Work Conference pointed out that the People's Bank of China said that it would uphold the supremacy of the people, not only meet the needs of economic development, but also resolutely not let the people's votes become "gross", and should protect the money bags in the hands of the people. For trust companies, it provides customers with full-life cycle trust services, builds a competitive product line based on customer needs and risk-return preferences, and relies on its own professional advantages.
According to the data of the China Trust Association, at the end of the fourth quarter of 2023, the total scale of capital trusts reached 17.38 trillion yuan, and the total scale of investment in the securities market (including stocks, funds, and bonds) was 6.6 trillion yuan, an increase of 853.6 billion yuan from the end of the third quarter, with a quarter-on-quarter growth rate of 14.85%, accounting for 38% in total, an increase of 3 percentage points from the previous quarter; Compared with the end of the fourth quarter of 2022, the scale increased by 2.25 trillion yuan, a year-on-year growth rate of 51.52%, and the proportion increased by nearly 10 percentage points.
Since the promulgation of the new regulations on asset management in 2018, asset management trusts have become an important direction for the transformation and development of the trust industry.
On the one hand, the variety of products is becoming more and more diverse. From the perspective of investment targets, asset management trusts mainly invest in bonds, stocks and funds, with bond investment as the mainstay. As of the end of the second quarter of 2023, the balance of trust funds invested in bonds was 4.04 trillion yuan, accounting for 25.73% of fund trusts and 79.85% of the securities market; From the perspective of investment types, it mainly includes cash management, fixed income (pure debt fixed income and "fixed income +"), allocation (TOF, FOF, MOM), equity, qualified domestic institutional investors and other types; From the perspective of product investment, it is mainly invested in low-risk investment areas, such as high-grade bonds, note assets, etc.; From the perspective of product form, FOF is the most common and has become one of the important driving points for the transformation of standard trusts by various trust companies.
On the other hand, the product line is constantly optimized. The investment targets cover a wide range of areas, including A-share stocks listed and traded on domestic stock exchanges, closed-end securities investment funds, open-end securities investment funds, corporate bonds, treasury bonds, convertible corporate bonds, etc.; The investment cycle is gradient, and according to the personalized needs of investors, we build weekly, monthly, quarterly and other product series.
Taking CITIC Trust as an example, the company continued to carry out asset management trust business, focusing on serving new quality productivity, promoting green and low-carbon, inclusive finance and other key areas, and building a product line covering different risk and return characteristics, with an asset management trust scale of RMB750.287 billion at the end of 2023. Among them, the inclusive financial business has disbursed more than RMB40 billion and served more than 26 million customers.
Although many trust companies have built a sound asset management product system, compared with securities companies and funds, trust companies still need to continuously strengthen capacity building, establish a professional investment and research system, develop products with the company's resource endowment, and further realize the empowerment of science and technology.
Performance 3: Continue to develop charitable trusts and contribute to the trust power of a well-off society.
Charitable trust is one of the important forms of the third distribution, and it is an effective business model to guide wealth for good, help common prosperity, and contribute to the power of trust for a well-off society.
The promulgation of the Charity Law of the People's Republic of China in 2016 provides institutional norms and legal guarantees for the healthy development of philanthropy. According to incomplete statistics, about 65 trust companies are involved in charitable trust business. Compared with seven years ago, only 18 trust companies and charitable organizations nationwide have filed charitable trust products, with a total scale of less than 100 million yuan.
According to data from the China Charity Information Disclosure Platform (Charity China), as of December 19, 2023, 1,602 charitable trust projects have been recorded, with a total asset size of 6.538 billion yuan. As of the end of 2022, the cumulative filing scale of charitable trusts nationwide reached 5.166 billion yuan, and the cumulative number of filings reached 1,184. Among them, the filing scale in 2023 will be 1.372 billion yuan, an increase of 493 million yuan from 2022; The number of filings also showed an accelerated growth trend to 418 cases, an increase of 22 cases from 2022. According to the data of China Trust Registration Company, from June to December 2023, a total of 49 institutions in the industry carried out charitable trust business, and 372 new charitable trust products were established, with an establishment scale of 664 million yuan, covering education, medical care, poverty alleviation, environmental protection and many other fields.
In the course of seven years of development, charitable trusts have gradually taken on many characteristics.
First, it covers a wide range of fields, and the purpose of charitable trusts covers all the fields listed in the Charity Law, such as education, common prosperity, rural revitalization, etc.
Second, trust companies actively cooperate with financial institutions, government agencies, industry alliances and other institutions to mobilize more entities to participate in charitable trusts, broaden the sources of charitable trust assets, and increase the investment income of charitable assets.
Third, there are a wide range of donated assets, such as CCB Trust has set up a charitable trust for artworks, and Foreign Trade Trust has set up a charitable trust for "customer rights and interests-points".
Fourth, charitable tools are widely used, such as the "CITIC Trust 2023 Xinxingyuan Donor Suggestion Charitable Trust", which has been successfully filed under the guidance of the Beijing Civil Affairs Bureau.
Taking CITIC Trust as an example, by the end of 2023, the cumulative filing scale of charitable trusts was 1.053 billion yuan, and the business scale and quality remained industry-leading. "CITIC Trust 2021 Fangmei Education Charitable Trust" won the 12th "China Charity Award" of the Ministry of Civil Affairs in 2023; The establishment of the "CITIC Trust 2023 CITIC Trust Donor Suggestion Charitable Trust" for employee participation is a useful exploration of the new model of charitable trust, making charitable donations more planned, more systematic and more flexible.
Performance 4: Continuously explore risk disposal service trusts to help enterprises resolve risks.
According to the data of China Trust Registration Company, from June to December 2023, a total of 48 trust companies in the industry carried out administrative management service trust business, with 916 newly established products with an establishment scale of 836.788 billion yuan, and a total of 21 trust companies carried out risk disposal service trust business, with 68 newly established products with an establishment scale of 325.831 billion yuan.
In 2019, CCB Trust pioneered the "Caidie" series of bankruptcy reorganization service trust business, and successfully applied the trust model to the bankruptcy reorganization project of Tianjin Bohai Iron and Steel Group, setting a precedent in the industry.
In 2021, a total of 6 trust companies focused on the layout of bankruptcy reorganization trust business, and two participated or intended to participate, and the overall entrusted assets exceeded 450 billion yuan.
In 2022, a total of 16 trust companies will implement risk disposal service trust business, of which 7 trust companies will carry out such business for the first time in 2022, and 49 new projects will be added to risk disposal service trusts, with an additional scale of 1.1 trillion yuan, and a total of 1.4 trillion yuan of existing entrusted assets.
In 2023, a total of 22 trust companies will participate in the bankruptcy reorganization service trust business, with a total of more than 1.5 trillion yuan in surviving entrusted assets.
After five years of exploration, enterprise bankruptcy service trust has become one of the key directions for the future development of trust companies.
First, it meets the needs of social development. According to the National Enterprise Bankruptcy and Reorganization Case Information Network, there will be as many as 17,400 bankruptcy review cases announced in 2023, an increase of 12,200 cases or 230% compared with 2019.
Features: large volume, long industrial chain, wide influence.
Commonality: More and more large/super-large enterprise groups fail to reduce leverage or adjust their operating structure, and eventually deteriorate from liquidity risk to bankruptcy.
Impact: There are many distressed enterprises involving financial institutions, investors, enterprise employees, and mutual insurance enterprises, and they have strong risk propagation capabilities, causing a wider social impact, and even impacting the regional credit environment and affecting regional economic development.
The second is to make up for the lack of a bankruptcy reorganization system. It is difficult to start the bankruptcy reorganization procedure, it is difficult to repair the bankruptcy reorganization enterprise, the implementation effect of the bankruptcy reorganization plan is poor, and the construction of the bankruptcy administrator team is not perfect.
The third is to give full play to the advantages of trust companies. Give full play to the institutional advantages of trust asset segregation, divest assets, isolate risks, and realize the orderly and stable disposal and realization of assets under the premise of effective control of debt repayment resources by creditors; The trust plan can simplify complex transaction structures such as debt retention and equity swap, and at the same time, it is not limited by the number of creditors, which can shorten the execution time and improve the execution efficiency. As a share-based financial product, trust beneficiary rights are flexible and convenient to transfer, which solves the problem of difficult asset circulation. The unified management of creditor's rights and debts can be realized by the trust structure arrangement and efficient information technology system, which can effectively solve the problems of large scale of restructured debts, complex assets and large number of creditors.
Taking CITIC Trust as an example, in the field of risk disposal service trusts, it has steadily promoted the operation of the special service trust project for bankruptcy and reorganization of HNA Group, and successfully won the bid for a number of large-scale institutional risk resolution service trusts, ranking first in the industry in terms of the scale of its existing business.
Along with the practice of enterprise bankruptcy service trusts, we are also facing challenges: first, the lack of basic systems, such as property registration, delivery system, and tax issues have yet to be resolved; Second, the business boundary needs to be broadened, in practice, trust companies often lack the leading power in enterprise bankruptcy service trusts, and courts, AMCs, law firms and other institutions generally play a key role; Third, the cost investment is large, and the profit space needs to be expanded.
Performance 5: Explore prepaid fund service trusts and try to solve social management problems.
Since 2013, domestic prepaid fund trustee service trusts have gone through two stages of development.
From 2013 to 2018, benchmarking against UK personal trusts, the industry began to try to create different scenarios to serve the consumption needs of individual customers. Starting from ZX's consumer trust, there are 7 trust companies and 8 products, covering consumer goods such as pension, house, BMW car, and IPHONE. In addition, the management of deposits in the sharing economy and transactions such as car rental, renting, long-term rental apartments, franchises, second-hand housing sales, and the depository of real estate pre-sale funds are also the main directions for trust companies to explore and carry out prepaid fund service trust business.
From 2019 to the present, after the introduction of the new regulations on asset management, trust companies continue to look for the direction of transformation, and the prepaid fund trustee service trust is one of them. Up to now, 8 trust companies have begun to try, involving property fees, training fees and other fields.
With the practice of prepaid service trusts, we are faced with challenges: first, the system dependence is high, and the short-term profit is insufficient; second, the lack of supporting systems and greater competitive pressure; Third, the public awareness is insufficient, and the market needs to be cultivated.
With a higher political position and development pattern, the trust company is integrating its high-quality development into the overall situation of serving common prosperity and the real economy, and hopes to make greater contributions to promoting social harmony and promoting financial innovation.