Efforts of China's national asset management companies (AMCs) to boost new investments' risk-adjusted returns may take time to steer self-sustainability among the four biggest AMCs, with government support still a major factor for their creditworthiness, S&P Global Ratings said in a Tuesday release.
The four major AMCs play key roles for financial stability, with government support helping boost their capital and credit profiles, S&P credit analyst Xi Cheng said.
The country's assets managers remain pressured by property sector weakness and legacy issues, Cheng said.
The national AMCs' measures to solidify derisking and underwriting standards on new investments is in line with guidance from major state-owned shareholders such as sovereign wealth fund Central Huijin and financial service conglomerate Citic Group.
Enhanced risk-pricing, more diverse exposures, and moderate asset growth bolster efforts to improve new business returns, S&P said.
Government support, such as greater board seat and discounted purchases of state-owned companies, have helped the national AMCs meet regulatory capital ratio thresholds and provide a boost to future profits, S&P said.
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