On the last working day before the Spring Festival of the year of the tiger, the people’s Bank of China announced to accept the application for administrative license of China Merchants Group’s Zhaorong investment and Wanxiang holdings for the establishment of a financial holding company. So far, the central bank has announced the application of five companies to establish financial holding companies.
On January 30, the central bank announced that it accepted the administrative license application of Shenzhen Zhaorong Investment Holding Co., Ltd. (hereinafter referred to as “Zhaorong investment”) for the establishment of a financial holding company.
China Merchants Shipping Co., Ltd., a subsidiary of China Merchants Group, is wholly-owned by China Merchants Group. According to industrial and commercial data, Zhaorong investment was established as early as 1997, with a registered capital of 7.78 billion yuan. The chairman of China Merchants finance investment is Hong Xiaoyuan, assistant general manager of China Merchants Group and director (Executive) of China Merchants Finance Executive Committee, and the general manager is Su min, deputy director (Executive) and China Merchants Bank Co.Ltd(600036) director of China Merchants Finance Executive Committee.
According to the official website of China Merchants finance, as a wholly-owned subsidiary of China Merchants Group, China Merchants financial investment will implement the regulatory requirements, take this opportunity to strengthen the construction of “three capabilities” of risk management, financial technology and wealth management, strive to achieve high-quality development, and build a leading financial holding group in China with innovation leading, synergy driven, distinctive characteristics.
In December last year, China Merchants finance held the 2021 annual retreat in Shenzhen. Hong Xiaoyuan stressed that over the past year, the construction of “wealth management ability, financial technology ability and risk management ability” in the financial sector of China Merchants Group has been preliminarily implemented in various work and assessment. Next, we should take the application of financial control as an opportunity to realize “empowerment” through “synergy” and “science and technology”, so as to further improve the ability of risk management and create the value of financial control.
According to the public information, the business layout of the financial sector of China Merchants Group is “4 + n”, “4” includes banks ( China Merchants Bank Co.Ltd(600036) ), securities ( China Merchants Securities Co.Ltd(600999) , Boshi Fund), insurance (Renhe insurance, China Merchants Haida), direct investment (China Merchants venture capital, China merchants sailing); “N” refers to a variety of finance, including China Merchants commercial finance leasing and China Merchants ping an asset management; In addition, China Merchants Group solely initiated the establishment of China Merchants Jinke in 2017.
China Merchants financial holding pilot has been in operation for years. Previously, the company was one of the pilot financial holding simulation supervision. As early as 2018, China Merchants Group has said that it will improve and optimize the regulatory requirements from the perspectives of corporate governance structure, risk control, related party transactions, capital adequacy and so on. First, do a good job in the risk isolation of industry and finance, including the separation of equity relationship and management mechanism, and eliminate cross shareholding and cross employment; Second, do a good job in the management of related party transactions to prevent benefit transmission or conflict of interest in the name of coordination; Third, build a risk early warning system, improve the risk information system and improve the efficiency of risk management; Fourth, promote audit concentration, build three layers and three lines of defense, and establish a comprehensive risk management system; Fifth, do a good job in capital management and consolidate the final barrier to prevent risks.
At the same time, on January 30, the central bank announced that it had accepted the application for administrative license of China Wanxiang Holding Co., Ltd. (hereinafter referred to as “Wanxiang holding”) to establish a financial holding company.
The largest shareholder of Wanxiang holdings is Lu weiding, the son of Lu Guanqiu, China’s first generation private entrepreneur, holding 74.57%; In addition, Shanghai guandingze Co., Ltd., funded by Lu weiding and Zhang Jinmei, holds 20% and Xiao Feng, vice chairman of Wanxiang holdings, holds 5%.
By the end of 2020, Wanxiang holdings had 38 subsidiaries included in the scope of consolidation. Subsidiaries in the financial field include Minsheng life insurance (43.84%), Tonglian payment (18.02%), Wanxiang trust (76.50%), Tonghui Futures (77.54%), Wanxiang leasing, etc. In addition, Wanxiang holdings owns many big data and blockchain companies, including Tonglian data and Wanxiang blockchain. Minsheng life insurance holds China Zheshang Bank Co.Ltd(601916) 4.29% shares and 50% shares of Zheshang fund.
So far, the central bank has announced that it has accepted the applications of five companies to establish financial holding companies, namely China Everbright Group, China CITIC Co., Ltd., Beijing Financial Holding Group, China Merchants investment and Wanxiang holdings. Except that Wanxiang holdings is a private enterprise, the rest are central enterprises or state-owned enterprises. However, it has not been officially approved by the financial holding company.
In 2018, the central bank confirmed the pilot of financial holding simulation supervision for five companies, including China Merchants Group, Shanghai International Group, Beijing Financial Holding Group, Suning group and ant financial services.
In September 2020, the State Council announced the decision on implementing the access management of financial holding companies, and the central bank announced the Trial Measures for the supervision and administration of financial holding companies, which will come into force on November 1, 2020. According to the measures, those who have the conditions of establishment and intend to apply for the establishment of a financial holding company shall apply to the central bank within 12 months from the date of implementation. The basic conditions for its establishment include holding more than two financial institutions, financial assets of 500 billion yuan (holding financial institutions including commercial banks), or financial assets of 100 billion yuan (holding financial institutions excluding commercial banks).
