A decade ago, the State Council approved four asset management companies to clear the country's big four banks of bad assets. Now, the government has issued reports on those companies, and approved the first trial reform of Cinda.
Cinda is China's first asset management company. It's wholly owned by the Ministry of Finance, and has registered capital of more than 25 billion yuan.
Over the last ten years, Cinda received nearly 1.5 trillion yuan in bad assets from more than ten banks and financial institutions. It's reclaimed almost 250 billion yuan in cash.
It's also participated in the trusteeship liquidation and risk management of some securities companies.
Tian Guoli, Chairman of China Cinda Asset Management Corp. said "Our future business will still focus on the disposal of bad assets, since we are quite familiar with that industry. Also, the profit margin and future potential of asset management is huge. At the same time, we will continue to develop professional financial platforms like securities, which will play an important role in disposing bad assets and improving the value of bad assets."
According to the current plan, Cinda won't accept other shareholders before it completes the reform. But after the reform, Cinda will become a stock company, and its business range will be extended. The company will be available for overseas investors, and will be allowed to list on both domestic and overseas markets.
Cai Esheng, Deputy Director of China Securities Regulatory Commission said "These companies have been seeking a commercialized transformation for many years. Now they can try out their way after the State Council approves their plan. I think they will choose to list on the market when everything's ready, since it will provide them a better way of financing."
Aside from its core business, Cinda has also purchased some insurance, fund and trust companies, as well as some other financial institutions.