Indexes in the Main Business Data of Trust Companies in the second quarter of 2016 released by CTA suggest that with the superimposition of multi-factors such as structural reform of micro economy, increasingly extensive competition of asset management industry and rising risks of credit defaults, China's trust industry still maintain a steady progress. Trust industry dedicated itself, keeping in line with the changing of micro background, in exploring new development opportunities, enhancing active management capabilities, strengthening risk control level and improving trust assets’ management approaches, in an effort to return to its institutional nature.

I. Steady progress

A. Trust assets

By the end of the second quarter of 2016, trust assets under management amounted to 17.29 trillion Yuan, growing by 8.95% compared with 15.87 trillion Yuan at the second quarter of 2015, showing a below-two-digit growth rate for the first time since 2010.

B. Proprietary assets and equity

At the end of the second quarter of 2016, proprietary assets reached 487.978 billion Yuan, with an annual growth of 17.25%. Investment has always been the major type, making 357.678 billion Yuan, accounting for 73.30% of proprietary assets. Monetary assets reached 56.508 billion Yuan, accounting for 11.58%. Loans totaled 36.7 billion Yuan, accounting for 7.54%.

Equity reached 398.766 billion Yuan, growing by 12.41% compared with the same period in previous year. Paid-up capital accounted for 45.67%. Trust compensation provision accounted for 4.05%. Undelivered profits accounted for 30.40%.

C. Risk projects

There were 605 risk projects in the second quarter of 2016, totaling 138.123 billion Yuan, growing by 33.58% compared with 103.4 billion Yuan in the same period of previous year. Non-performing assets accounted for 0.80%.

II. Keep transformation

A. Operating performance

In the second quarter of 2016, operating income and total profits both dropped in terms of annual growth rates as in the first quarter. Operating income totaled 28.143 billion Yuan, with an annual reduction of 10.40% compared with 31.410 billion in the second quarter of 2015. Total profits reached 19.943 billion Yuan, dropping by 10.39% compared with the same period in previous year.

B. Profitability of trust assets

In the second quarter of 2016, the number of liquidated trust schemes was 1,558, the real annualized return rate for beneficiaries was 6.35%, the average annualized fee rate to trustees was 0.50%.

III. Optimizing functions

A. Divided by function

Since 2015, the proportion of financing trusts were continuously reducing while non-discretionary trusts increasing. By the end of the second quarter of 2016, financing trusts reached 4.09 trillion Yuan, accounting for 23.68%. Investment trusts reached 5.73 trillion Yuan, accounting for 33.13%. Non-discretionary trusts reached 7.47 trillion Yuan, accounting for 43.20%. Investment and non-discretionary functions are expected to be the two wheels for driving the development of trust industry in the long run.

B. Investment targets

In the second quarter of 2016, industrial and commercial enterprises, financial institutions, securities, infrastructures and real estate were still the major investment target areas.

Funds flew to industrial and commercial enterprises reached 3.62 trillion Yuan, increasing by 13.84% compared with the same period in previous year, accounting for 23.64%.

Funds invested in financial institutions accounted for 19.56%, making financial institutions the only area with proportion in pecuniary trusts rising.

Securities markets appealed 2.7 trillion Yuan, accounting for 17.63%.

Investment in infrastructure accounted for 17.31%.

Investment in real estates counted for 8.52%, dropping by 0.41 percentage points compared with the same period in previous year.