China to merge three major asset managers into China Investment Corp -Xinhua (updated)

China Cinda Asset Management

29/01/2024 02:16

(Adds context, companies' no response to Reuters enquiries)
       BEIJING, Jan 29 (Reuters) - China plans to merge three
of the nation's biggest bad debt managers into sovereign wealth
fund China Investment Corp (CIC)  CIC.UL , state-run Xinhua
Finance News reported, as part of a plan to reform financial
institutions.
    Three asset management companies (AMCs) - China Cinda Asset
Management  1359.HK , China Orient Asset Management and China
Great Wall Asset Management - will be incorporated into CIC,
Xinhua Finance News reported on Sunday, citing unidentified
industry insiders.
    The Ministry of Finance is the largest shareholder of the
three AMCs.
    CIC and China Cinda did not immediately reply to Reuters'
request for comment. Calls to Orient Asset Management and Great
Wall went unanswered.
    The move is in line with a government commitment to
separating its roles as regulator and shareholder of state-owned
financial institutions.
    With lacklustre economic growth, regulators are curbing risk
in the nation's $63 trillion financial industry amid mounting
local government debt and crisis in the real estate sector.
    China established four asset management companies (AMCs) in
1999 to help handle bad loans from its four largest state banks,
which were facing the prospect of insolvency.
    But the distressed asset managers expanded beyond their
initial remit, and themselves began to pose a risk to the
financial system.
    The government established CIC in 2007 to diversify foreign
exchange holdings and seek maximum returns, its website showed.
It has registered capital of $200 billion.
    China Huarong, which was renamed China CITIC Financial Asset
Management last week, was excluded from the merger. The asset
manager was taken over by state-owned conglomerate CITIC Group
 CITIC.UL  in an overhaul of the troubled asset manager from
2021.

 (Reporting by Ziyi Tang, Bernard Orr and Shanghai newsroom;
Editing by Christopher Cushing)