Exclusive | Non-standard stall!Big bank financial sub non-standard assets accounted for a large collective decline, investment managers: want to be less than

2022-05-04 0 By

The numerator does not move, while the denominator (total asset allocation) expands rapidly, resulting in a dramatic decline in the proportion of non-standard assets in bank wealth management.After multiple investigations, the reporter learned that by the end of 2021, the proportion of non-standard assets in the financial management subsidiaries of the six state-owned large banks had all been less than 6.1%.This also drives the state-owned large bank group caliber (including head office and wealth management sub-group) of the non-standard ratio of the collective decline, because the head office management of the old assets in the non-standard stopped adding.There are deep reasons for the shrinkage of non-standard allocation size: not only the rigid regulatory limits on non-standard size, but also the market acceptance of long-term products suitable for carrying non-standard assets still needs to be improved.”Incremental to do, to adjust structure,” a bank financial investment manager told reporters, non-standard investment is now entering a new era, is say goodbye to the practice of diversified investment udic, state key mining countries, large corporation and other customers, to develop debt-to-equity swap, share reform, the rights and interests, such as new varieties, will have the ability and is willing to bear the risk of investors to the rest of the capital market.”We (non-standard) is still doing, but the second half of the year accounted for a full half”, the reporter investigated a large bank financial management subsidiary that.At the end of June 2021, the company’s non-standard ratio was around 12%. By the end of 2021, it had fallen to just over 6%.The same is happening at several other big banks’ wealth management units.Reporters learned exclusively: by the end of 2021, 6 state-owned bank financial subsidiaries of the non-standard accounted for less than 6.1%.The reason is “6.1” this has zero and whole figure, because the above non-standard accounting for more than 6% of the financial sub-camp has been the highest in the large bank financial sub-camp.Two others approached 6%, with the lowest non-standard accounting for less than 3%.Compared with the middle of 2021, the proportion of six non-standard companies has dropped significantly or even halved, and the trend of pressure decline is continuing.The reduction in size has both active and passive components.”Proactive” means to actively control the scale to meet regulatory requirements: the regulatory requirements require that the balance of all financial products of financial subsidiaries invested in non-standard debt assets shall not exceed 35% of the net assets of financial products at any time.This regulation is extremely important, because with the subsequent clarification of regulatory rules, a major turning point occurred in practice: the supervision of yindeng Center, BSE and other platforms released products, identified as “non-standard”.Until then, they were widely regarded as “non-standard” and there were high expectations that they would become standardised assets.And this part of 2-3 trillion “non – standard” into non – standard, non – standard quota suddenly appears very tight.In addition to the 35% limit, the risk factor for nonstandard assets is also set at a higher level for risk capital provision.According to the Measures for the Management of Net Capital of Commercial Banks’ Financial Management Subsidiaries (Trial), the risk coefficients of bonds and stocks are both 0, while the risk coefficients of non-standardized creditor’s rights are set according to the rating and guarantee methods of 1.5%, 2% and 3% respectively.A professional in the project evaluation department of a financial management subsidiary pointed out that the risk coefficient of non-standard debt in guarantee and credit categories has been higher than the benchmark of 1.5% for equity investment of unlisted companies, which means it is difficult for banks to generate scale effect in non-standard investment of financial products.”Passive” means that the denominator (total assets) increases much more than the numerator, making the non-standard ratio passively smaller.The surge of standardized assets has greatly boosted the growth of total assets. In addition, in the past two years, the growth rate of non-standard assets as a component has slowed down or even remained unchanged, and the proportion of non-standard assets allocated by financial management sub-has continued to decline.”The numerator and denominator grow at different accelerations.Denominator mainly by standard (assets) support, on the amount of fast;But non-standard really difficult to cast, cycle and long.Fixed income can also refer to external rating agencies, non-standard credit risk review completely depends on their own, “an investment manager in charge of non-standard projects told reporters.”Cash products take away a large part of the match.In addition, cash management alternatives, the shortest holding period, investment cycle of these open products are not standard.Therefore, I think at least 20% to 40% of the limited products that can be matched with non-standard products should be non-standard.”, a financial management company personage to reporter analysis.According to an analysis by everbright Securities’ financial industry research team, the weighted average maturity of closed-end WMPS has been rising steadily from 161 days at the end of 2018 to 357 days in September 2021, but the team expects it to exceed a year by the end of 2021.What does that mean?This verifies the judgment of the above financial management industry: most of the products issued by financial management subsidiaries are not suitable for non-standard terms.Two financial companies told reporters a approximate figure: the average maturity of their non – standard assets between 1.3-1.6 years.To sum up, non-standard investment is constrained in multiple dimensions such as capital end, asset end, product end and operation end. In addition, the rapid growth of standardized assets pushes up the denominator (i.e., total assets), and the proportion of non-standard investment sharply drops to a common feature of several financial management subsidiaries.In the interview, different professionals emphasized the common view that non-standard investment is very important.From the perspective of the allocation needs of institutions themselves, non-standard is of great positive significance for long-term funds seeking stable assets such as insurance, sovereign funds and annuity.For bank financial management, non – standard is necessary to stabilize the net value of products and increase the income.Since the implementation of the new rules, once as a non-standard main varieties of entrusted loans and trust loans continue to shrink.Now according to the reporter preliminary understanding, each non – target configuration focus on different.Some non-standard financial services are mainly configured with inter-bank loan, private supply chain, bIFA varieties;Some financial management of the main allocation of city investment and north gold.”Of course we want non-standard, but there is a shortage right now, which is what we call ‘non-standard undersupply’.”, a bank financial management personage bluntly.”In today’s low interest rate environment, it is difficult to achieve a 2.5% return on standardized products, and assuming that our products need to give customers more than 4% to be competitive, it means that we have to allocate more than 5.5% of non-standard assets in our products.This is in fact the whole bank wealth management are facing the universal problem of high yield asset shortage.”, the person to the reporter analysis.Under the environment of low interest rate, bank financial management is faced with the “non-standard shortage” silently, which is insufficient for non-standard asset reserve.One side of the stock of non – standard assets pressure drop difficult.The professional from the project review department of the financial planning subsidiary said that most of the non-standard assets left by the bank at the asset management department of the head office are assets with relatively long terms, such as some equity projects of unlisted companies and industrial fund projects with a term of more than 7 or 8 years.There are also some Ming stock real debt business, currently there is no corresponding to meet the needs of equity financing business varieties can be undertaken, can not return to the table.But good inflection point phenomenon is happening in the field of non-standard investment.The aforementioned investment manager in charge of non-standard projects told reporters: the connotation of their work since the second half of last year has undergone some substantial changes — less city investment, less real estate, more convertible bond projects.In his opinion, now non-standard investment has entered a new era, bid farewell to the practice of unitary investment in urban investment, focus on mining state-owned enterprises, large private enterprises and other customer groups, to carry out debt-equity swaps, share reform, equity and other new types.”The non-standard of our company is still being added all the time, but the growth rate is certainly not as fast as the old model of single city investment.But it’s definitely a trend, and non-standard investments are diversifying.””, the investment manager said.This is also very much in line with the industry’s previous call.Liu Feng, director of China Chief Economist Forum, once wrote that we should actively explore the use of modern financial engineering technology for asset securitization of investment targets, such as “shareholding reform”, “debt-equity conversion”, “usuity-right”, “property rights” trust arrangement and listing.Give full play to the advantages of data and technology, make use of financial engineering and structured finance design, adopt the mode of stock plus debt to provide financing to enterprises, realize risk control by controlling part of the equity or core assets of enterprises, and provide enterprises with more direct, more economical and more formal financial services.For example, by transferring the interests of enterprises’ real estate, land, production lines and other assets that are not acceptable to banks, and locking appropriate cash flows, securitized financial products can be issued.In 2022, a new era of non-standard will begin.Editor: Li Xuefeng