OREANDA-NEWS. April 18, 2013. When the assets custody scale of the entire trust industry reached RMB 7.47 trillion at the end of 2012, becoming the second largest financial sector, the assets custody scales of all companies inside the trust industry were also re-ranked.

Recently, the reporter learnt from inside the industry that the top 10 ranking of trust companies in terms of assets custody scale at the end of 2012 showed that CCB Trust and Industrial Trust with the background of banking shareholder as well as Chang'an International Trust rose quickly. The two trust companies in the banking system came into top three, only next to CITIC Trust.

In comparing the business incomes and net profit data from unpublished financial statements for the top 10 trust companies, we can also get a rough idea about their business structures and development strategies.

Re-ranking of assets custody scale
CITIC Trust stayed at the top more firmly. As revealed by relevant data, by the end of 2012, the assets custody scale of CITIC Trust has reached RMB 591.3 billion, up by 47.8% YoY, remaining at the No.1 at home for five consecutive years.

Following CITIC Trust, CCB Trust and Industrial Trust in the banking system rose to the second and third places respectively, but at the end of 2011, the two ranked No.6 and No.10 respectively.

In fact, the two trust companies in the banking system have kept doubling their assets custody scales year by year since they were restructured and run by their banking shareholders. As revealed by historical data, the assets custody scale of CCB Trust grew from RMB 27.6 billion in 2009 to RMB 66 billion in 2010 and to RMB 190.7 billion in 2011, and its rank in terms of assets custody scale also rose to No.6 from No.24 at the end of 2009.

In 2012, the assets custody scale of CCB Trust hit RMB 350.8 billion, up by 84% YoY, securing the second place successfully. After growing by 379% in 2011, the assets custody scale of Industrial Trust rose 123% in 2012, hitting RMB 336 billion. Hence, it climbed to the third place.

From inside the industry, the fast growth of trust assets scale of the two companies in the banking system has to do with its background of banking shareholders closely. “Upon the tightened banking credit, a great amount of banking deposits are diverted off-sheet, and the trust companies under banks have self-evident advantages,” indicated a senior trust manager.

Besides the two trust companies in the banking system, in the top 10 ranking, Chang'an International Trust has also made an eye-catching achievement. In 2012, the assets custody scale of Chang'an International Trust grew from RMB 81.4 billion at the end of 2011 to RMB 218.7 billion, a significant increase of 168.7%, and its rank also jumped from No.19 to No.6.

“Controlled by private capital, Chang'an International Trust has a flexible operation mechanism and comparatively progressive style. In recent years, the company established more than 20 business teams and its own direct-sale channel. This is the main reason contributing to its fast business growth,” indicated the above senior trust manager.

Similarly, Zhongrong International Trust, which is also known for a progressive style in the trust sector, returned to No.4 with an assets custody scale of RMB 299.5 billion, an increase of 71.9% YoY in 2012.

In contrast, Yingda International Trust, FOTIC and Ping An Trust went down in the ranking. In particular, FOTIC saw a negative growth in assets custody scale, which dropped from RMB 238.7 billion at the end of 2011 to RMB 210.4 billion.

Different business structure
Because the significant difference in business structure among the 10 trust companies, their business incomes and net profits in the unaudited financial statements are obviously different from the ranking of assets custody scale.

CITIC Trust, ranking No.1 in terms of assets custody scale, had a business income reaching RMB 4.388 billion in 2012, of which the incomes of handling charges and commissions accounted for RMB 3.229 billion. With its net profits hitting RMB 2.739 billion, it is now the only trust company with net profits exceeding RMB 2 billion.

Zhongrong International Trust, ranking No.4 in terms of assets custody scale, had a business income approaching that of CITIC Trust the most. In 2012, the business income of Zhongrong International Trust hit RMB 3.714 billion, of which the incomes of handling charges and commissions accounted for RMB 3.533 billion, even higher than that of CITIC Trust. However, its net profits only reached RMB 1.524 billion, far behind RMB 2.739 billion, the figure of CITIC Trust.

As analyzed by the person-in-charge of the business department of a trust company based in Beijing, the active management business accounted for a high proportion in Zhongrong International Trust in the whole industry, so its business income was considerable, but the cost of the company was a bit high. The unaudited financial statement of Zhongrong International Trust reveals that its business expenditure was RMB 1.571 billion in 2012, but that of CITIC Trust was only RMB 752 million.

The two trust companies in the banking system with their assets custody scales ranking front, however, both fell behind in terms of either business income or net profits.

In 2012, the business income of CCB Trust hit RMB 1.055 billion, up by 76.7% YoY, and its net profits amounted to RMB 548 million, a YoY increase of 66.76%. Both of them were behind the growth rate of assets custody scale. The performance of Industrial Trust was a bit better. Its business income hit RMB 1.445 billion, and its net profits amounted to 772 million, up by 278% compared with RMB 204 million in 2011.

Although the two trust companies in the banking system witnessed rocketing assets custody scales, the aforementioned officer indicated, the handling charges for channel based businesses were usually low, so their business incomes and net profits were not great in number. In contrast, Industrial Trust had more active management businesses. As a result, it had a higher business income although its assets custody scale was below that of CCB Trust. Moreover, Industrial Trust registered obviously higher growth rates of business income and net profits than that of assets custody scale in 2012. This shows that its business structure was under further adjustment.
Besides, although the assets custody scale of FOTIC dropped in 2012, its net profits broke through RMB 1 billion for the first time. Hence, it becomes a new member of the community of trust companies with net profits exceeding RMB 1 billion.