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The Rapid Development of Financial Asset Management Corporations: Analysis and Enlightenments(No.148,2016)


By Wang Yang, Research Team on " Review on the Performance of Financial Asset Management Corporations ", Research Institute of Finance, DRC

Research Report No. 148, 2016 (Total 5031) 2016-11-14

Abstract: Since the restructuring reform in 2010, the Financial Asset Management Corporations have witnessed a swift development. There are mainly two reasons: first, the goal is made clear relating to the strategic position of their independent development and market-oriented transformation; second, they have actively explored the model for business innovation, transformation and upgrading. But the disposal of non-performing assets of banks is not the main reason for their rapid development. The class credit business especially the real estate financing business accounted for a large part of their profit, which is based on the special policy and market environment. The expansion of business scale is due to profit growth, restructuring and public listing, leverage improvement and integrated financial management. At present, the leverage ratio is close to the ceiling, but the professional subsidiary companies have not yet become the main source of profit and the synergistic effect also needs to be strengthened. The growth of Financial Asset Management Corporations is expected to slow down. It is suggested that the government should further cultivate the ability of these corporations in resolving the risks of non-performing assets on the market, appropriately and orderly unleash restraints on market competition, encourage these corporations to make pilot practice in terms of making innovations in resolving risks, implement integrated and coordinated supervision over their comprehensive financial management, and strengthen the supervision of related housing business.

Key words: comprehensive financial management, non-performing asset business, class credit business