Three joint-stock banks' asset management companies launched, with 10 billion yuan in capital targeting "specialized and innovative" enterprises.

On November 23, China Merchants Bank and China CITIC Bank, two joint-stock banks, announced on the same day that their respective AICs (Financial Asset Investment Companies) had received approval from the National Financial Regulatory Administration to commence operations.

Along with Xingyin Investment, which launched not long ago, three new players have officially entered the AIC market this year.

Looking back, this round of AIC company initiations has proceeded at a fast pace:

In March this year, regulators issued a notice expanding the pilot program for AIC equity investments, opening a policy channel for commercial banks to establish AICs.

Subsequently, Industrial Bank, China CITIC Bank, and China Merchants Bank received approval between May and July to set up AICs, and Postal Savings Bank also obtained regulatory approval in October.

As of November 24, there are now 9 commercial bank AICs nationwide, of which 8 have been approved to commence operations.

Due to the 10 billion yuan paid-in capital threshold for establishment, and high dependence on resources and business support from parent banks, the entrants on the AIC track remain unequivocally major banks, with industry registered capital approaching 150 billion yuan.

Regarding the launch of their AIC, China Merchants Bank stated that they will engage in professional, market-oriented debt-to-equity swaps, deepen collaboration between industry and finance and within the group, actively carry out equity investment pilot initiatives, and enhance the company's integrated business capabilities.

China CITIC Bank indicated it will focus on strategic emerging industries and key fields such as “specialized, refined, distinctive, and innovative” enterprises, engage in market-oriented debt-to-equity swaps and equity investment, and help enterprises lower their leverage ratios.

Unlike the initial strict restrictions on debt-to-equity swaps and related measures, the scope of AIC business now has gradually expanded to include core debt-to-equity swaps, on-balance sheet direct investments, and off-balance sheet business.

As of November 24, there are 629 nationwide AIC equity investment enterprises (including direct and indirect investments), with shareholding levels accounting for 62.9% first-tier, 29.5% second-tier, and 7.1% third-tier.

Investment areas are concentrated in manufacturing, construction, scientific research and technical services, as well as electricity, heating, gas and water production and supply industries.

More than 30% of invested institutions are “specialized, refined, distinctive, and innovative” small and medium enterprises or “small giants” in this category.

It is noteworthy that AIC institutions are still in the early stages of development, especially in equity investment, which began relatively late and has not yet contributed substantial profits back to the parent bank.

In the first half of 2025, the AIC subsidiaries of the “Big Five” banks (ICBC, Agricultural Bank, China CITIC Bank, China Construction Bank, Bank of Communications) posted a combined profit of 7.191 billion yuan, contributing only 0.55% to the overall profits of their parent banks.

This means that at the current stage, the primary functions of AIC are still more about risk mitigation and leveraging comprehensive benefits, such as achieving low-cost deposit accumulation and expanding space for fee income.

However, in terms of growth rate, the five major bank AICs achieved a compound annual profit growth rate of 57.93% during 2018-2024.

In addition, with further opening up of equity investment business, AICs still have the potential to become new growth drivers in an environment of narrowing interest margins and weak wealth management.

With industry expansion and new entrants on the horizon, the AIC sector is poised for more changes:

For example, on the day Xingyin Investment began operation, it signed strategic cooperation agreements with four investment institutions from Fujian Province, including Fujian Gold Investment Asset Investment and Fujian Min Investment Asset Management, and signed project cooperation agreements with 12 enterprises, with the intended total amount exceeding 10 billion yuan.

In the future, whether each company can transform its strategic layout into a sustainable business model and make substantive profit contributions to their parent banks remains to be seen.

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