Understanding Finance from scratch

Chapter 17 Who is in charge of handling our "money" - learn something about financial institutions every day (4)
The golden age of investment banking is over.Where will investment banks go in the future?Customers' demands for financial services are endless. Will investment banks make a comeback one day?let us wait and see.

Finance Corporations: An Underappreciated Financial Force
这是一条旧新闻。中国石化财务有限公司、中国电力财务有限公司、中石油财务有限公司、中海石油财务有限公司、宝钢集团财务公司和上海汽车集团财务有限公司等6家财务公司的注册资本分别都超过10亿元。其中，中石化财务公司的注册资本高达25亿元。总资产在百亿元以上的财务公司共有7家。其中规模最大的为中石油财务公司，总资产已超过1000亿元，大大超过一些中小股份制银行、证券公司等金融机构。2002年，财务公司利润总额在1亿元以上的有6家；5000万～1亿元的有6家；1000万～5000万元的有29家。

Under the condition of strict regulation in the financial market, financial licenses of financial companies are precious and scarce resources, and ordinary people do not know much about financial companies.So what is the main business of the financial company?What are the characteristics compared with other financial institutions?
Financial companies, also known as financial companies, are different from banks in that they provide financial services for corporate technological transformation, new product development and product sales, and are financial institutions that focus on medium and long-term financial services.The name of each country is different, and the business content is also different.But most of them are subsidiaries of commercial banks and mainly take deposits.To put it bluntly, a finance company is like a capital reservoir for an enterprise group. It stores the funds of each member enterprise together and uses them where they are most needed and have the highest return, thereby increasing the return on investment of the entire group.

Financial companies appeared relatively late, rising at the beginning of the 20th century, but they developed rapidly.In the United States, many well-known companies are involved in the financial industry and have their own financial companies, the most famous of which is General Electric Finance.As the largest financial company in the United States, its current business involves five major categories of consumer services, equipment management, middle market financing, special financing, and special insurance. At the end of 2001, its total assets were 3760 billion U.S. dollars and its profit was 52 billion U.S. dollars. If you participate In terms of banking assets ranking, it can be ranked second in the US banking industry.

More than two-thirds of the world's top 500 companies have their own financial companies. GE, General Motors, Ford, Motorola, Ericsson, Siemens, Intel, etc. have realized the combination of industry and finance and common development through financial companies. The financial companies they set up have a wide range of businesses, involving group internal fund management, consumer credit, buyer's credit, and equipment financing. Leasing, insurance, securities issuance and investment, etc., with strong profitability, have become an important part of the group's business.

Generally speaking, the models of financial companies mainly include the American model and the British model.

Financial companies in the American model are non-bank financial institutions featuring invigorating commodity circulation and promoting commodity sales.It is attached to the manufacturer and is a controlled subsidiary established by some large durable consumer goods manufacturers to promote their products. This type of financial company mainly provides financing services for retailers, mainly in the United States, Canada and Germany.At present, the total assets of the financial company industry in the United States exceed 8000 billion US dollars. The financial services of financial companies in the field of circulation involve almost all commodities from automobiles, home appliances, housing to various industrial equipment, and play a very important role in promoting commodity circulation. .

The British model financial companies are basically attached to commercial banks, and the purpose of their formation is to evade the government's supervision of commercial banks.Because the government expressly stipulates that commercial banks are not allowed to engage in securities investment business, and financial companies are not banks, so they are not subject to this restriction. This type of financial companies are mainly distributed in the United Kingdom, Japan and Hong Kong, China.

Because the operations of financial companies are mostly based on enterprise groups, they have the following characteristics in terms of operation:
First of all, financial companies have a wide range of businesses.A finance company is a financial institution within an enterprise group, and its business scope is limited to the enterprise group, mainly providing financial services to the member enterprises within the enterprise group.The business of a finance company includes general banking services such as deposits, loans, settlements, guarantees, and agency services. It can also conduct securities, trust investment, and other businesses with the approval of the People's Bank of China.

Second, financial companies are very attached to corporate groups.There are two main sources of funds for a finance company: one is the capital invested by the group company and members of the group company, and the other is the deposits of the member companies of the group company in the finance company.The funds of the finance company are mainly used to provide financial support for the member companies of the group company, and a small amount is used for securities investment that has nothing to do with the leading industry of the group company.Since the source and use of funds of the finance company are limited to the group company, the finance company is highly dependent on the group company, and its development status is related to the development status of the group company where it is located.

Finally, financial companies must not only accept the supervision of enterprise groups, but also the supervision of the People's Bank of China.A finance company is a financial institution within an enterprise group, and most of its shareholders are members of the group company, so its business activities must be supervised by the group company.At the same time, what a finance company is engaged in is financial business, and its business activities must be subject to the supervision of the People's Bank of China.

Trust and investment company: financial institution entrusted by the recipient

This is a piece of news in 2008: According to the latest statistics from the China Banking Regulatory Commission, as of the end of June 2008, 6 trust companies across the country had achieved a total operating income of 54 billion yuan and a steady increase in net profit to 84.53 billion yuan.In addition, the total trust assets managed by 48.17 trust companies have exceeded the 54 trillion yuan mark, reaching 1 billion yuan.

So, what types of trust investment companies are there?What is the status of their development?
A trust investment company is such a financial institution: as a trustee, it manages money on behalf of others; its main business: operating funds and property entrustment, agency asset custody, financial leasing, economic consulting, securities issuance and investment, etc.Trust and investment companies, bank credit and insurance are called the three pillars of the modern financial industry.

In October 1979, marked by the establishment of China International Trust and Investment Corporation, it opened the prelude to the development of the new China's financial trust industry.After experiencing the baptism of overthrowing, rectifying and reviving, trust and investment companies have become an indispensable and important force in my country's financial system.However, in my country, the business scope of trust and investment companies is mainly limited to trust, investment and other agency businesses. A small number of those that are really needed can concurrently operate leasing, securities business and issue special trust beneficiary bonds for more than one year with the approval of the People's Bank of China. Loans and investments with specific objects are allowed, but bank deposits are not allowed.In addition, the market access conditions for trust and investment companies are very strict. For example, the registered capital of a trust and investment company must not be less than RMB 10 million, and the approval procedures for its establishment, modification, and termination must be implemented in accordance with the regulations of the financial authority.

When we talk about trust investment companies, we have to mention four types, or four stages:

The first is the start-up trust investment company.As the name suggests, a start-up trust and investment company refers to a trust and investment company that has just started its trust business, has insufficient business experience, has a small asset scale, and has few types of trust products.This type of trust and investment company has just started, and its business is still mainly imitation.Most of their trust products are collective fund trusts, and their investment fields are mostly concentrated in the direction of shareholders and original fixed customers.Such companies need to gradually accumulate business experience through imitation, tap their own advantages, cultivate core competitiveness, and form business advantages in a certain industry and field.

The second type is a growth-stage trust investment company.From here, it is considered to be on the right track. After a period of development, trust and investment companies in this period have accumulated certain operating experience, a certain customer base, a medium asset scale, and a mature business model, gradually forming a competitive advantage. business area.Trust and investment companies in the growth stage generally actively explore trust business innovations, are able to find high-quality project resources based on their own advantages, and design trust products with significant profitability. development prospects.The types of trust business are not limited to collective fund trusts, but also try to get involved in investment and other businesses in other related and familiar fields.

The third type is a mature trust investment company.A mature trust and investment company has rich business experience, strong asset scale, and good operating efficiency. It has formed its own advantageous products in a certain industry or field, has its own core profit model, and has strong competitive strength.A mature trust and investment company can provide customers with distinctive financial products and services, based on providing customers with personalized services, and has a stable and loyal customer base.This is a very ideal state, but it is still necessary to continue to innovate and explore in the business field, or actively prepare for the company's listing, or seek strategic cooperation with internationally renowned financial institutions to seek greater development.

The fourth is the peak trust company.Gaofeng trust and investment company refers to a company that occupies a dominant position in the trust market, is recognized as a market leader, occupies a huge market share, has comprehensive business fields, and has outstanding financial strength and business capabilities.They have the characteristics of the largest asset scale, the most types of business, rapid innovation of trust products and a wide range of business in the market from many aspects.

The ultimate goal of the trust investment company is to make the trust products cover a wide range and complete the business categories, and turn the trust investment company into a large financial supermarket.At the same time, it integrates its own resources and expands its own strength, so that the trust and investment company can truly become a universal bank.At present, my country's trust and investment companies still need to expand their own influence and have a globalized international marketing vision, so that they can develop quickly and well!

Stock Exchange: Keeping Securities in Continuous Circulation

There has been a stock exchange in our country for a long time.In the initial securities trading in Shanghai, most of the brokers engaged in other businesses. Securities trading was only a sideline business, and it had not yet reached the level of professional speculation.At that time, there were no majestic buildings and complete equipment, and people drank tea in bustling teahouses to negotiate prices and conduct transactions.

After the Revolution of 1934, the securities market developed rapidly. In [-], the Shanghai Stock Exchange built an eight-story building with a magnificent interior.On the opening day, government dignitaries, celebrities and industrial giants came to congratulate and congratulate, an unprecedented grand occasion.On the ground floor of the securities building, there are nine trading cabinets lined up in the middle.In the corridors on both sides, there are many telephones, which are directly connected to various securities accounts, and the securities market is spread through them.Each trading cabinet also deals in three or four different stocks.When you plan to buy or sell stocks, you cannot directly enter the market, you must entrust a broker to buy and sell on your behalf. The broker then stretches out his hand to bid the price on the trading cabinet designated for the stock, buy with the palm facing inward, and sell with the palm facing outward. .If the other agent thinks it is agreeable, he will also extend his hand to express, and the two parties agree to make a deal.For every transaction, regardless of the transaction amount, the field staff will immediately record the transaction price on the market board.At the same time, the telephone operators of each securities number immediately use the intercom to notify their respective securities numbers.This is how the stock market is formed.

Everyone is familiar with the stock exchange, but when it comes to the types, functions and influences of the stock exchange, how much can you say?
The stock exchange mainly provides trading places and services, and also has the function of managing securities transactions, but it cannot participate in securities transactions itself.A stock exchange is a legal person organization of a non-financial institution. It has two basic organizational forms, one is a stock company exchange, and the other is a membership exchange.

The corporate stock exchange is a stock exchange that provides trading venues and service personnel for the purpose of making profits, so as to facilitate the trading and delivery of securities firms.It can be seen from the practice of stock trading that this kind of stock exchange needs to charge the listing fee of the issuing company and the commission for securities transactions, and its main income comes from a certain percentage of the trading volume.Moreover, the personnel who operate this kind of exchange cannot participate in securities trading, so that the fairness of transactions can be guaranteed to a certain extent.

In a corporate stock exchange, the general manager is accountable to the board of directors and is responsible for the day-to-day affairs of the stock exchange.The duties of directors are: to approve important articles of association and business and financial policies; to draw up budgets and final accounts and profit distribution plans; to approve investment; to approve the list of securities firms participating in stock trading; ;Deliberate on the registration, change, revocation, closure of listed stocks and the collection of listing fees; review proposals and reports submitted to the general meeting of shareholders; decide on the selection and dismissal of managers and members of the evaluation committee, and review other items.The duties of the supervisors include reviewing the annual final accounts report, supervising business, checking all accounts, etc.

(End of this chapter)