China's GDP achieved 6.9% growth and economic construction obtained significant progress. Each index in the Main Business Data of Trust Companies in 2015 showed that: The trust industry forged ahead with determination in the course of adapting to the new normal of the economy, stood the test of abnormal fluctuations of the stock market in 2015, discovered new market opportunities, cultivated new growth impetus, and focused more on development quality and benefits. The assets under management of trust companies restored the growth momentum in the 4th quarter of 2015, with operating income and profits rising significantly. Trust assets exceeded 16 trillion Yuan in 2015, with industry transformation achieving initial success, business structure increasingly becoming rational, non-discretionary business and investment function significantly strengthened, active management capability enhanced, and fund supply and demand matched continuously. Those progresses lay good foundations for the new development and deep adjustments of trust industry under the conditions of supply side reform in 2016.

I. Rational growth of trust industry

A. Trust assets

At the end of 2015, trust assets under management totaled 16.30 trillion Yuan, with an annual growth of 16.60% from 13.98 trillion Yuan at the end of 2014. It is a true reflection of the positive long-term development trend of China’s economy, and also a result of the concerted efforts of trust companies to expand businesses and promote transformation with all strength.

B. Non-trust assets and equity

At the end of 2015, total non-trust assets reached 462.328 billion, achieving 28.93% growth from 358.602 billion Yuan at the end of 2014.

Investment has been the main type of non-trust assets; it reached 257.65 trillion Yuan in the first quarter of 2015, accounting for 70.63%; 296.118 trillion Yuan in the second quarter of 2015, accounting for 71.15%; 293.571 trillion Yuan in the third quarter of 2015, accounting for 70.27%; 326.535 trillion Yuan in the fourth quarter of 2015, accounting for 70.63%. There was a slump in loans, totaling 34.936 billion Yuan at the end of 2015, dropping by 7.77% compared with that at the end of 2014. Monetary assets experienced a rapid growth in 2015, reaching 72.560 billion Yuan at the end of 2015, up by 37.78% compared with 52.663 billion Yuan at the end of 2014.

Equity reached 381.869 billion Yuan at the end of 2015, growing by 19.48% from 319.622 billion Yuan at the end of 2014. Paid-up capital maintained an upward tendency, totaling 165.251 billion Yuan at the end of 2015, and its proportion in equity, though presenting a slight downward trend, standing at 43.27% at the end of 2015, approximating 43.38% at the end of 2014.
Proportion of trust compensation provision in equity represented a progressive tendency, reaching 4.12% at the end 2015, contributing to the enhancement of trust industry’s risk-prevention capability.

C. Risk projects

There were 464 risk projects at the end of 2015, totaling 97.3 billion Yuan, down by 11 billion Yuan from 108.3 billion Yuan at the end of the third quarter of 2015. Risks generated from collective pecuniary trust accounted for 61% and from single pecuniary trust accounted for 37%. Non-performing assets accounted for 0.6%, a slight reduction from 0.69% at the end of the third quarter of 2015.

II. Sharp improvment of business performance

The performance of the trust industry has attracted much attention against the background of downward pressure of economic growth as well as the frequent fluctuations of the stock market and foreign exchange market in 2015. Compared with 2014, the operating income and profits in 2015 of the trust industry rose sharply.

A. Operating performance

The operating income reached 117.606 billion Yuan, with an increase of 23.15% from 95.495 billion Yuan at the end of 2014.

The total profits of trust industry achieved were 75.059 billion Yuan at the end of 2015, with 16.86% growthas against 64.230 billion Yuan at the end of 2014. The profits of per staff member reached 3.2 million Yuan for 2015.

B. Effectiveness in management as trustees

In the fourth quarter of 2015, the number of liquidated trust schemes was 1,935, the average annualized return rate to trustees was 0.53% and the real annualized return rate to beneficiaries was 13.96%.  

III. Appropriate business structure

The deep adjustments of the trust industry are gradually being implemented, the investment function is being constantly strengthened, and the industry transformation has achieved initial success.

A.    Investment management capability

At the end of 2015, financing trusts totaled 3.964807 trillion, a reduction of 15.71% in size compared with that at the end of 2014. It is predicted that such downward tendency will be witnessed in financing business over a period of time. In contrast, investment trusts showed a progressive trend, with proportion reaching 37% at the end of 2015 from 33.70% at the end of 2014, totaling 6.031702 trillion Yuan at the end of 2015, annually growing by 28.01%. Non-discretionary trust reached 6.307111 trillion Yuan.

B. Sources of trust assets

Since 2014, the proportion of single pecuniary trusts has been declining, standing at 57.36% at the end of 2015 from 62.58% at the end of 2014, and the proportion of collective pecuniary trusts and property trusts has been rising. At the end of 2015, the collective pecuniary trust accounted for 32.78%, totaling 5.343643 trillion Yuan. The property trust reached 1.608882 trillion Yuan, with annual growth rate of 71.26%.

C. Investment targets

In 2015, the 14.69 trillion Yuan of pecuniary trust assets were mainly invested in five major fields as usual, however, with the amounts of fund flows to each field dramatically changing.

Industrial and commercial enterprises were still the no.1 welcoming targets, attracting 3.31 trillion Yuan at the end of 2015, with proportion a slight shrinking, from 24.03% at the end of 2014 to 22.51% at the end of 2015.

Fund flew to securities outnumbered inter-financial institutions and infrastructure investment, reaching 2.99 trillion Yuan with annual growth of 61.62%, making securities the second welcoming targets.

Inter-financial institutions have been the third welcoming targets since 2013. At the end of 2015, fund invested in this field totaled 2.63 trillion Yuan, annually growing by 15.86%.

Infrastructure investment was 2.63 trillion Yuan at the end of 2015, down by 5.05% in size from 2.77 trillion Yuan at the end of 2014 while with an increase of 1.15% compared with 2.6 trillion Yuan at the end of 2013.

Real estate was the no.5 welcoming field. At the end of 2015, investment in real estate totaled 1.29 trillion Yuan, down by 1.53% in size.

IV. "Shoring up weak spots" leading the direction of trust industry transformation

2016 is the debut year of the "13th Five-year Plan", and "shoring up weak spots" contains huge investment and financing demands and the fund flow possibly switched to the new targets. On the one hand, we can see that trust companies highly value transformation, and inject new impetus into the trust industry through innovation in Internet trust, family office, consumer trust, consumer crowd-funding platform, artwork trust, PPP projects, assets securitization, PE, account management, and QDII, etc. In the meantime, trust companies shall be aware that they shall not only be developing with major efforts, but also need to break many institutional restraints and obstacles in order to realize innovation and transformation, which cannot be achieved in just one year. On the other hand, we stress that the direction of our transformation shall catch up with the investment fields and focal points of the "shoring up weak spots" clearly proposed by the government.