China Merchants Group Grabs Approval to Become First Central SOE Financial Holding Company

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Central state-owned enterprise (SOE) China Merchants Group (CMG) has obtained approval from Chinese regulators for the establishment of a licensed financial holding company.

On 2 September the Chinese central bank announced that it had approved the issuance of a financial holding company license to China Merchants Group Financial Holding Co., Ltd. (招商局金融控股有限公司), a fully owned subsidiary of CMG.

The move marks the establishment of the first financial holding company by a central SOE under the direct remit of China’s State Council.

In December 2017 the State Council made CMG one of 5 companies to be included in financial holding company trials, and in October 2020 CMG approved a decision to apply for the establishment of a financial holding company.

Headquartered in Hong Kong, CMG is one of the largest SOE’s under the direct control of the Chinese central government. Its operations are concentrated in the three areas of transport and logistics, financial and urban development.

According to its first half report CMG has total assets of 10.4 trillion yuan and more than 19 trillion yuan in assets under management.

In the first half of 2022 the operating revenues of CMG’s financial business were 259.9 billion yuan, for year-on-year (YoY) growth of 7.7%. Net profits were 73.3 billion yuan, for YoY growth of 5.7%.

In 2021 CMG’s operating revenues were 929.2 billion yuan, for YoY growth of 14.2%, while total profits were 212.2 billion yuan, for YoY growth of 21.2%. Net profits were 169.5 billion yuan, for YoY growth of 23.7%.