Source: Bloomberg
Author: Jacob Gu
A difficult shadow bank in China signed a cooperation agreement with two large financial institutions, which was a step closer to the potential assistance led by the government.
About a month ago, several investment products of Zhongrong International Trust Co., Ltd. were overdue, which disturbed the market.Today, according to the announcement issued by the company on Friday evening, it has signed an agreement with CITIC Trust (CITIC Group subsidiary) and CCB Trust (Investment Holdings by China Construction Bank).
Zhongrong Trust stated that the agreement provides so -called commission management services to "improve the company's management efficiency".The statement did not specifically refer to financial terms or other types of assistance.
According to Bloomberg News last month, the Chinese government has clearly arranged the accounts of CITIC and CCB Trust review to stabilize the company's operations.
Zhongrong Trust publicly acknowledged its problems in a statement on Friday, saying that "affected by multiple factors internal and external factors", some of the trust products of the company cannot be paid on schedule.
Zhongrong Trust and Zhongzhi Enterprise Group's overdue payment of high -net -worth individuals and enterprises, which triggers the turbulence of the financial market.This crisis even triggered rare protests in Beijing.
People familiar with the matter earlier said that before the problem was public, the State Administration of Finance and Administration had established a working group in July to be responsible for the risk of integrating in the review.One of the people familiar with the matter said that nearly half of the funds raised by Zhongrong went to its parent company or subsidiaries.
For borrowers who cannot obtain conventional bank loans for real estate developers and local governments financing platforms, the Chinese trust industry is a key source of replacement funds.The trust company brings together funds from customers and invests it in various tools and projects.
According to Goldman Sachs Group estimates, this industry is seriously affected by the downturn in China's real estate market, and may face a loss of about $ 38 billion.
The announcement on Friday states that the debt -debt -debt relationship and trust legal relationship related to China Rong Trust have not changed. The company will continue to assume the responsibility of the trust product investors in accordance with the relevant laws and trust contracts.
Recent data shows that the size of CITIC Trust management is 1.5 trillion yuan, and the asset size of the trust management management is about 1.4 trillion yuan.
The announcement stated that the agreement will take effect on September 15, and the validity period is one year, but the negotiation between the two parties can end or postpone in advance.
