Huarong restructured as joint-stock financial giant

China's newly born joint-stock financial giant said it will pay major attention to bank-related businesses while developing securities, trust, financial leasing, futures and fund management businesses, so as to become a modern financial services enterprise.

Huarong Asset Management Corporation, one of China's four asset management companies set up to deal with the toxic assets of state-owned banks, was officially unveiled as a joint-stock company on Friday.

"The founding marks China Huarong's transformation from a policy-oriented institution to a market-oriented one," read a statement issued at a ceremony marking the official establishment of China Huarong Asset Management Co., Ltd.

The new company has a registered capital of 25.8 billion yuan (4.12 billion U.S. dollars), with 98.06 percent of shares held by the Ministry of Finance and the remaining 1.94 percent by China Life Insurance Company, according to the statement.

It said that Huarong will introduce both domestic and overseas strategic investors and will go public via an IPO at an appropriate time.

"After the establishment, the company will put its focus on commercial banking, trust, leasing and other banking businesses while continuing to do a good job in asset management," said Lai Xiaomin, chairman of the new China Huarong.

In 1999, China set up four asset management companies, including Cinda, Huarong, Great Wall and Orient to deal with the toxic assets of the country's four big state-owned banks in a bid to help them transform quickly into market-oriented financial institutions.

The four companies finished the state-assigned task of dealing with the toxic assets in 2006 and have run a pilot program of restructuring firms into joint-stock companies since then.

Since the commercial restructuring kicked off, Huarong has witnessed a period of unprecedented growth. Between 2009 and 2011, it maintained an annual profit growth of over 100 percent for three consecutive years. In the first half of 2012, its profits surged 60 percent year on year despite a slowing economy.

Huarong has accepted, acquired and disposed of toxic assets worth more than 720 billion yuan to date, according to the company.

Currently, Huarong has 32 branches in 30 provincial regions, and operates 10 subsidiary companies in asset management, banking, securities, trust, leasing, futures and other financial businesses.

Huarong is the second asset management company transformed into a joint-stock company, following China Cinda's restructuring in June 2010.