"Wild Times" of Cooperation between Bank and Credit for Dry Goods —— Bank Channel Product Model

Up to now, there are 68 licensed trust companies in China. Looking through the names of these trust companies, we will find that quite a few of them use the same or similar trade names as commercial banks, such as CCB Trust, Bank of Communications International Trust Trust and Everbright Xinglong Trust, and even use the same logo. It's not that trust companies play the "edge ball" of the bank or solicit business for themselves in the name of the bank, but that a few years ago, trust was an important export of bank funds and bank wealth management funds, and the establishment of relevant trust institutions was a measure for banks to expand their business and improve their income. As one of the earliest, most mature and widely used trust product models in China, the bank-trust cooperative product is an important window to deeply understand the trust product model, and it is also very helpful to understand the trust model under the new asset management regulations.

The title of the article is "Wild Times of Bank-Trust Cooperation", which is intended to show that bank-trust cooperation is an important birthplace of domestic trust business, which was once full of vitality but chaotic. Because bank funds are limited by loan amount, object and industry, trust sometimes becomes the "channel" of bank funds. On the surface, it is a loan from the trust plan to customers, but through the source of funds, it is found to be a bank. In this business model, banks play a leading role, and the investment direction of trust products is completely determined by banks. Even enterprises that use funds are customers of banks, so they have to adopt trust financing for various reasons. Trust seems to be a "small follower" of the bank, without any goals and consciousness. This is the most traditional and earliest mode of bank-trust cooperation, and it has also become one of the mainstream modes of trust products. ?

This model can be divided into loan channel model and bill channel model.

First, the loan channel model

Due to the credit line, the size of loan-to-deposit ratio and other reasons, the bank will entrust a trust company to launch a single or collective trust fund plan through its own funds or the sources of funds recommended by the bank to lend funds to customers. Therefore, there are two ways in this mode:

1. loan channel mode 1: the bank purchases the trust plan in whole or in part with its own funds (the rest is recommended by the bank). The structural flow chart is as follows:

Detailed description of the mode flow:

1. Banks give credit to financing enterprises that are not suitable for direct loans.

2. When the bank partially purchases the trust plan, it will introduce the remaining trust projects to investors on behalf of the trust company.

3. Banks, investors and trust companies sign trust contracts.

4. The trust company initiated the establishment of a single or collective trust fund plan.

5. Investor Investment Trust Plan

6. Trust plans to lend to financing enterprises.

7. After the loan term expires, the financing enterprise will repay the principal and interest to the trust plan.

8. The trust company collects management fees from the principal and income of the trust plan.

9. The trust plan will return the investment principal and income to banks and investors.

2. Loan channel mode 2: After the bank introduces the project to one or several investors, it signs a tripartite agreement with the trust company and investors, stipulating that if the borrower fails to repay the principal and interest in time, the bank will purchase the trust beneficiary rights held by the investors at maturity. The second structural flow chart is as follows:

1. Banks give credit to financing enterprises that are not suitable for direct loans.

2. The bank introduces the trust plan to investors on behalf of the trust company.

3. Banks, trust companies and investors sign contracts.

4. The trust company initiated the establishment of a collective trust fund plan according to the entrustment.

5. Investor Investment Trust Plan

6. Trust plans to lend to financing enterprises.

7. When the loan term expires, the financing enterprise will repay the principal and interest to the trust plan.

8. The trust company collects management fees from the principal and income of the trust plan.

9. The trust plan returns the principal and income to investors.

If the financing enterprise fails to repay the loan according to the contract, the following bank repurchase mode will be triggered:

The above process starts from step 7, as follows:

7. If the financing enterprise fails to repay the loan as agreed, the bank will purchase the beneficiary right of the trust plan from investors.

8. The financing enterprise pays off the collective trust plan.

9. The trust company collects management fees from the settlement amount.

10. The collective trust plan distributes the paid-off income to the bank.

Second, the bill channel model

Similarly, because of saving resources on loan-to-deposit ratio, banks are interested in digesting existing bills and discounting them in time. This mode consists of two specific modes:

1. The first one is the transfer and realization of bank bill income right, which can be called "bill income right transfer mode". The bank transfers the income right of bill assets (mainly bank acceptance bills) to the trust plan, and after the transfer, the bank will perform the duties of bill custody and collection on its behalf. The flow chart is as follows:

Detailed description of the mode flow:

1. The bank entrusts a trust company to initiate a trust plan.

2. The trust company initiates a single trust plan with the bank as the entrusting party, with the purpose of obtaining bill income.

3. Bank Investment Trust Scheme.

4. The trust plan will transfer the bill income right to the ticket-holding enterprise with bank funds.

5. When the bill is paid at maturity, the principal income will be returned to the trust plan.

6. Trust companies collect management fees from investment principal and income.

7. The trust plan will return the investment principal and income to the bank.

2. The second operation direction is just the opposite to the previous one, that is, the bank purchases the bill income right through the trust plan, which can be called the "bill income right acquisition mode", and its flow chart is as follows:

Detailed description of the mode flow:

1. The bank entrusts a trust company to initiate a trust plan.

2. The trust company initiates a single trust plan with the bank as the entrusting party, with the purpose of obtaining bill income.

3. Bank Investment Trust Scheme.

4. The trust plan will transfer the bill income right to the ticket-holding enterprise with bank funds.

5. When the bill is paid at maturity, the principal income will be returned to the trust plan.

6. Trust companies collect management fees from investment principal and income.

7. The trust plan will return the investment principal and income to the bank.

Of course, with the regularization of domestic trust business and the tightening of relevant regulatory policies, the independent consciousness of trust institutions is constantly strengthening, and the cooperation between banks and trusts is no longer always dominated by banks, and the banking channel business is also shrinking year by year. Compared with the supervision of bank funds everywhere, trust is playing its due role with its higher flexibility. Another article discusses in detail the mode of trust institution leading and bank-trust "cooperation".