Recently, the China Banking and Insurance Regulatory Commission approved the change of CITIC Bank's equity and related shareholder qualifications, and agreed to transfer 31,406,992,773 shares of CITIC Bank held by CITIC Limited to CITIC Financial Holdings for free.

21st Century Business Herald reporter Bian Wanli reported on that the transfer of CITIC Financial Holdings will be further ahead.

Recently, China Banking and Insurance Regulatory Commission approved the change of equity of CITIC Bank and related shareholder qualifications, and agreed to transfer 31,406,992,773 shares of CITIC Bank held by CITIC Limited to CITIC Financial Holdings free of charge (hereinafter referred to as this equity change).

After the free transfer is completed, CITIC Financial Holdings directly holds 64.18% shares of CITIC Bank, which means CITIC Financial Holdings will become the largest shareholder of CITIC Bank. In fact, in addition to CITIC Bank, CITIC Financial Holdings has also taken action against other financial companies in CITIC Group , such as CITIC Consumer Finance Company, CITIC Securities , etc.

small financial holding model, equity transfer actions are frequent

In September 2020, in order to strengthen supervision and management of non-financial enterprises, natural persons and other entities, standardize the behavior of financial holding companies, and prevent systemic financial risks, the State Council issued the " Decision on Implementing the Access Management of Financial Holding Companies " (hereinafter referred to as the "Access Decision"). The "Access Decision" clearly states that access management will be implemented for financial holding companies, and authorizes the central bank to carry out market access management and organize supervision of financial holding companies.

Subsequently, the central bank issued the " Trial Measures for Supervision and Administration of Financial Holding Companies " (hereinafter referred to as the "Financial Holding Measures"), which made detailed provisions on the establishment standards, corporate governance, risk management, supervision and management of financial holding companies. People close to regulators said that the establishment of a financial holding company will help promote non-financial enterprises to effectively isolate finance and industry, prevent cross-infection of risks, realize centralized and unified management of financial equity, and promote the standardization of sustainable development .

In March 2022, the central bank announced to the public that it approved the establishment license of financial holding companies of China CITIC Financial Holdings Co., Ltd. (continued) and Beijing Financial Holdings Group Co., Ltd. . On March 24, CITIC Financial Holdings completed industrial and commercial registration, and its business scope includes corporate headquarters management and financial holding company business.

21st Century Business Herald reporter learned that CITIC Group has set up a new company internally, transferring the equity of its financial institutions to carry out centralized and unified management, in order to isolate industrial business and prevent cross-infection of risks. This method is commonly known as the "small financial holding model".

In fact, in addition to the soon-to-be- holding CITIC Bank, CITIC Financial Holdings has also taken action against other financial companies of CITIC Group.

For example, on November 4, the Beijing Banking and Insurance Regulatory Bureau approved the change of equity of CITIC Consumer Finance, and CITIC Financial Holdings held 535.1% of the shares, becoming the largest shareholder. On June 23, CITIC Securities announced that after CITIC Financial Holdings acquired CITIC Securities Co., Ltd. and CITIC Shares transferred free of charge (accounting for a total of 18.45% of the company's total share capital), it will become the largest shareholder of CITIC Securities after it acquired CITIC Securities Co., Ltd. and CITIC Shares. On July 11, CITIC Prudential Life Insurance issued an announcement stating that CITIC Limited plans to transfer 50% of CITIC Prudential Life Insurance's equity to CITIC Financial Holdings for free. After the equity transfer is completed, CITIC Financial Holdings will hold 50% of the equity of CITIC Prudential Life Insurance.

In the future, CITIC Group will further strengthen centralized and unified management and control of the comprehensive financial service sector through CITIC Financial Holdings, strengthen financial service capabilities, build a solid foundation for high-quality development of , and promote the long-term and healthy development of the comprehensive financial service sector. After the equity change of

, the five independences of CITIC Bank will be maintained

. Specifically, the equity change will be changed. CITIC Financial Holdings acquired 64.18% of CITIC Bank's shares held by CITIC Limited through this transaction, including 28,938,928,294 A shares shares and 2,468,064,479 H shares shares. At the same time, there is also CITIC convertible bond with a face value of 26.388 billion yuan, of which CITIC convertible bond with a face value of 26.388 billion yuan was transferred to CITIC Financial Holdings on July 18, 2022.

The acquisition method is the free transfer of state-owned assets within the internal transfer. After the transaction is completed, CITIC Financial Holdings became the controlling shareholder of CITIC Bank, and the actual controller is still CITIC Group.

(CITIC Bank's equity structure chart after the equity change is completed)

In addition to this acquisition, CITIC Financial Holdings and CITIC Co., Ltd. will subscribe to the CITIC Bank's share allotment plan based on the approval progress of regulatory agencies. CITIC Co., Ltd. plans to dispose of the remaining CITIC Bank shares after the transfer of shares based on financial regulatory requirements and the overall situation of the securities market, and the proportion of disposal of shares shall not exceed 1.211% of the current total share capital of CITIC Bank.

In order to continue to maintain the independent operation of listed companies, the acquirer CITIC Financial Holdings promises to maintain the independence of CITIC's banking business, asset independence, personnel independence, financial independence, and institutional independence.

It is worth mentioning that the Governor of CITIC Bank also mentioned CITIC Financial Holdings at the 2022 interim performance conference. He believes that "the establishment of CITIC Financial Holdings has 'three benefits': one is conducive to improving comprehensive financial service capabilities; the second is conducive to improving unified customer service capabilities; the third is conducive to improving comprehensive risk prevention and control capabilities."

Fang Heying said that after the establishment of CITIC Financial Holdings, CITIC has entered a new stage of guaranteeing the organizational system support mechanism. Under common rules and communication mechanisms, each subsidiary works together to jointly analyze opportunities, formulate plans, and deploy marketing. Through financial coordination and industrial and financial coordination, strengthen linkage and coordinated breakthroughs in various fields, and continuously improve the collaborative ecology. CITIC Financial Holdings is building a risk system for CITIC Financial Holdings from the unity of five dimensions: organization, policy, process, technology and culture. This is conducive to capturing some information points of risk on a larger scale and earlier, and also conducive to coordinated disposal of risks.

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