Minmetals International Trust’s revenues grew 24% to Rmb5.16 billion ($800 million) in 2020, with Rmb3.75 billion in fee income, while net profits rose 32% to Rmb2.78 billion.
Minmetals’ registered capital also got a boost, rising from Rmb6 billion to Rmb13.05 billion, or among the highest in the industry. On the instruction of the Chinese regulators, Minmetals, along with its peers, has proactively reduced trust assets under management to Rmb700 billion, and increased the portion of trust assets under active management to over 85% of its total trust AUM.
Minmetals may not be the largest or the most profitable of trust companies in China, but what impressed Asiamoney most was the fact that it has continued to lead the strategic transformation of Chinese trust companies as Beijing cracks down on the shadow banking sector.
Under pressure from regulators to cut down the size of the conduit business across the industry – whereby trust companies essentially offer their outreach and preferential regulatory framework to banks and non-banks to channel their funds – Minmetals has beaten its peers in building a full-blown wealth management business.
Minmetals’ wealth management centre, developed over the course of a decade and run by He Fei, has served tens of thousands of high net-worth (HNW) individuals and institutional clients. The firm sold Rmb117.5 billion of wealth management products in 2020, including Rmb88.3 billion to retail clients and Rmb29.2 billion to institutions. Year on year, total sales jumped 70% while the retail portion surged 86%.
The impressive results are partly thanks to the firm’s efforts in building an open product architecture, covering underlying assets from private securities and private equity to overseas-listed stocks and offshore preference shares. Its ability to provide offshore investment products got a welcome boost at the end of 2020 when it received a $100 million quota for China’s outbound investment scheme known as the Qualified Domestic Institutional Investor.
Minmetals’ product offering and its investment advisory and asset allocation capability continue to attract more investors, including HNW individuals, and helped it to attract nearly 6,700 new clients last year. There was a 115% surge year on year in the number of clients with a net-worth of more than Rmb10 million to 2,120. These clients made up nearly one fifth of the firm’s total active clients. The average account balance of the retail client base rose 70% to Rmb7.25 million year on year.
During the Covid-19 pandemic, Minmetals streamed nearly 100 open classes covering topics such as macroeconomics and investment strategies, and attracted a live audience of 50,000.
The firm continued to assume social responsibilities, launching the country’s first charitable trust last year, and used its mobile platform to make donations to the underprivileged Guizhou province.