China Approves Fifth Nationwide Asset Management Company

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China is on track to see the launch of its fifth asset management company (AMC) that operates on a nationwide basis following the issuance of approval by the banking regulator.

The China Banking and Insurance Regulatory Commission (CBIRC) on 17 December announced via its official website that it had given its approval for China Galaxy Asset Management Co., Ltd. (中国银河资产管理有限责任公司) (CGAM) to commence operations.

According to domestic media reports CGAM has already obtained a “Financial Operating License” from CBIRC, and is now required to submit a further report to CBIRC within six months of the date of approval.

According to CBIRC’s approval Galaxy has registered capital of 10 billion yuan, and its equity structure is as follows:

  • China Galaxy Financial Holdings (中国银河金融控股有限责任公司), with a 6.5 billion yuan capital contribution for 65% of equity;
  • Central Huijin Investment (中央汇金投资有限责任公司), with a capital contribution of 1.33 billion yuan;
  • Nanjing Zijin Investment Group Co., Ltd. (南京紫金投资集团有限责任公司), witha capital contribution of 1 billion yuan;
  • Beijing Financial Street Capital Operation Centre (北京金融街资本运营中心), with a capital contribution of 600 million yuan;
  • CITIC Securities Company Limited (中信证券股份有限公司), with a capital contribution of 570 million yuan.

The approved business scope for Galaxy includes handling of the non-performing assets of financial institutions; management, investment and disposal of non-performing assets; debt-equity swaps; investment, management and disposal of equity assets; issuance of financial bonds; interbank lending and the provision of commercial financing to other financial institutions.

CBIRC has also approved the appointment of Li Mei (李梅), chair and party secretary of China Galaxy Financial Holdings, as chair of CGAM; Liu Zhihong (刘志红) as deputy-chair, You Chun (游春) as director and general manager, and Wang Jilong (万继龙) as director and deputy general manager.

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