Recently, a wave of capital injections from trust companies has been making headlines, signaling a significant shift in the financial industry landscape. On February 14, the Tianjin Bureau of the National Financial Regulatory Administration officially approved a change in the registered capital and shareholding structure of Beifang International Trust Co., Ltd. (commonly referred to as "Beifang Trust"). The approval indicated that Beifang Trust would increase its registered capital by approximately 342 million yuan, elevating it from 2.002 billion yuan to 2.344 billion yuan. This latest round of financing will raise the company's equity by 1 billion yuan, bringing total equity to approximately 6.957 billion yuan.

Earlier in January, Jilin Trust also announced a successful capital increase. Following a shareholder meeting evaluation and approval from the Jilin Regulatory Bureau of the National Financial Regulatory Administration, the registered capital of Jilin Trust rose from 3.15 billion yuan to 4.205 billion yuan. The entire new capital was contributed by Jilin Fangyuan Asset Management Co., Ltd., showcasing the growing financial support in the trust sector.

This was not the first capital increase for either of these companies. Beifang Trust had previously appropriated nearly 1 billion yuan from undistributed profits to increase its registered capital to 2 billion yuan in December 2023, without altering the equity structure. In the latest capital infusion, Beifang Trust welcomed two new investors: the Tianjin Bohai Chemical Group Co., a state-owned enterprise, and China Chengtong Holdings Group Co., Ltd., through its fully-owned subsidiary. By increasing capital and acquiring shares, these enterprises have fortified Beifang Trust's financial foundation. The executives at Beifang Trust articulated that this strategic adjustment in their capital structure would enhance their capacity for business innovation and transformation, bolster their risk resistance capabilities, elevate technological proficiency, and bolster talent acquisition efforts.

A review of the historical landscape of capital increases among trust companies reveals a fluctuating trend. According to statistics from Youyi Trust Research Institute, capital increases peaked in 2016 and 2017, amounting to 38.5 billion yuan and 40.3 billion yuan, respectively. Subsequently, while the size of capital increases saw a decline in the following years, the total still surpassed 10 billion yuan annually. By 2024, only two trust companies announced capital increases, totaling a mere 606 million yuan. Dongguan Trust raised its registered capital from 1.656 billion yuan to 2.065 billion yuan, an increase of approximately 409 million yuan, while Shanxi Trust raised its capital from 1.357 billion yuan to 1.554 billion yuan.

A professional from a prominent trust management company in Beijing commented on the recent volatile trends in capital enhancement, likening it to a rollercoaster ride. This variability stems from the transitional nature of the trust industry, leading to decreased capital consumption and a resultant diminishing urgency for capital supplementation from the perspective of maintaining net capital adequacy ratios. Simultaneously, some shareholders of trust companies exhibited decreased capacity and willingness to commit additional investments due to profitability considerations.

Furthermore, Shuaiguo Rang posits that recent mandates from state-owned enterprises regarding "retreating capital" have significantly impacted shareholder dynamics within trust companies. New regulations dictate that central enterprises can generally not establish, acquire, or gain stakes in various financial institutions. For financial entities that yield minimal returns relevant to their primary business and carry high risk spillover, investments are generally advised against. "Trust companies are now engaging in shareholder transitions through equity transfers to usher in new stakeholders, which can subsequently open new avenues for business transformation and governance," he concludes.