China Merchants Bank Expected to Take Over Tomorrow Holding’s Former Trust Unit
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A deal with CMB will make New Times Trust the fifth trust firm owned by a Chinese bank
China Merchants Bank Co. Ltd. (CMB), one of the country’s leading joint-stock commercial lenders, is moving closer to taking over New Times Trust Co. Ltd., a former unit of failed financial conglomerate Tomorrow Holding Co. Ltd., Caixin has learned.
CMB has been in talks with New Times Trust to acquire 100% of the troubled trust firm, sources close to the matter told Caixin.
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- China Merchants Bank (CMB) is set to acquire 100% of New Times Trust from the defunct Tomorrow Holding, with a deal announcement expected soon.
- New Times Trust, previously under investigation, sought investors for a 1.85 billion yuan sale in May, after financial regulators seized it in 2020.
- Acquiring New Times Trust will give CMB a trust license, enhancing its wealth management capabilities and marking it as the fifth bank-owned trust firm in China.
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Who’s Who
- China Merchants Bank Co. Ltd.
- China Merchants Bank Co. Ltd. (CMB), established in 1987, is China’s first joint-stock lender. By end of 2023, it held assets of 11.03 trillion yuan, making it China’s seventh largest bank. CMB had revenue of 339.1 billion yuan and net profits of 146.6 billion yuan. It had 197 million retail customers and 13.32 trillion yuan in assets under management. CMB is listed in Shanghai and Hong Kong and seeks a trust business license to complement its existing financial services.
- New Times Trust Co. Ltd.
- New Times Trust Co. Ltd., formerly part of Tomorrow Holding Co. Ltd., was founded in 2004 and is based in Inner Mongolia. It sold trust products to finance Tomorrow Holding-linked companies. In 2020, financial regulators seized New Times Trust due to risks from Xiao Jianhua's illegal activities, including misuse of funds and bribery. By the end of 2019, it managed 322.4 billion yuan in trust assets. Currently, China Merchants Bank is in talks to acquire it.
- CCB Trust Co. Ltd.
- CCB Trust Co. Ltd. is backed by China Construction Bank. It is one of the four trust firms owned by Chinese banks, alongside Shanghai International Trust Corp. Ltd., BOCOM International Trust Co. Ltd., and China Industrial International Trust Ltd.
- Shanghai International Trust Corp. Ltd.
- Shanghai International Trust Corp. Ltd. is one of the four trust firms in China owned by a bank. It is backed by Shanghai Pudong Development Bank. The firm is mentioned in the context of New Times Trust potentially being acquired by China Merchants Bank, which would make New Times Trust the fifth bank-owned trust firm in China.
- BOCOM International Trust Co. Ltd.
- BOCOM International Trust Co. Ltd. is a trust firm backed by the Bank of Communications. It is one of the four other trust firms in China owned by a bank, along with firms backed by China Construction Bank, Shanghai Pudong Development Bank, and the Industrial Bank.
- China Industrial International Trust Ltd.
- China Industrial International Trust Ltd. is one of the four other trust firms owned by Chinese banks, specifically controlled by the Industrial Bank. This makes it similar to New Times Trust, which is soon to be acquired by China Merchants Bank (CMB), enhancing their wealth management and trust business capabilities.
- Tibet Trust Co. Ltd.
- Tibet Trust Co. Ltd. is mentioned in the article in the context of previous acquisition talks with China Merchants Bank (CMB). Despite discussions, no deal was reached. Further specific details about Tibet Trust Co. Ltd. are not provided in the article.
- China Jingu International Trust Co. Ltd.
- The article mentions that China Merchants Bank (CMB) had previously held talks with China Jingu International Trust Co. Ltd. about a possible takeover, but no deal was agreed upon. No additional details about China Jingu International Trust Co. Ltd. are provided in the article.
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What Happened When
- 2017：
- Xiao Jianhua was placed under investigation.
- 2020：
- Financial regulators seized nine of Xiao Jianhua's financial companies, including New Times Trust.
- September 2021：
- New Times Trust announced a plan to find new investors to take over all of its shares in an equity restructuring, but no progress was reported.
- July 2022：
- The takeover of New Times Trust by financial regulators ended.
- September 2022：
- New Times Trust first put its shares up for sale but failed to find investors.
- By the end of 2023：
- CMB had total assets of 11.03 trillion yuan and 197 million retail customers.
- May 2024：
- New Times Trust put its entire stake up for sale at the China Beijing Equity Exchange, with bids starting at 1.85 billion yuan.
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