(Yicai Global) Dec. 6 -- Chinese securities brokers, once awash with money, are now selling off property, shutting down units, and even charging fees for crucial meetings as they grapple with a slump in business.
Anhui province-based Guoyuan Securities has put its property in Shanghai on sale for CNY10 million (USD1.5 million), CHNFund, an e-paper owned by People's Daily, reported. A month ago, Central China Securities disposed of 11 properties in Zhengzhou, Beijing and Heyuan, including staff quarters and offices of its sales department, the report added. The estimated value of these assets was CNY68.4 million.
The performance of brokerages and investment banks has deteriorated amid a sluggish capital market and a slower pace of initial public offerings over the year.
The Central China Securities properties on the sales block are idle assets, which will help improve the efficiency of its asset use, revitalize fixed assets, and further enhance its asset structure following the transactions, the company said in a statement, adding that the asset sale is in line with its long-term development goals.
Guoyuan Securities planned to sell 128 million domestic shares in Huishang Bank at CNY3.01 each to raise a total CNY385 million, the company said on Nov. 17.
The sale will further optimize resource allocation, revitalize existing assets, and improve the firm's financial structure, Guoyuan said in its statement. If the transaction is completed by Dec. 31, it will increase this year's annual investment income by CNY255 million, the company added.
Closing branches has also been one way to cut costs. Three brokers have abolished four units over the year. The Guangdong Securities Regulatory Bureau approved Yingda Securities' request to shut its Guangdong unit at the end of May. The Jiangxi Securities Regulatory Bureau approved the closure of four offices of AVIC Securities, and stipulated that the branches to be abolished should not add new customers or carry out new business activities in June.
Companies are even charging entry fees for annual strategy meetings which used to be free. Shenwan Hongyuan and Huachuang Securities have charged for the 2019 annual strategy meetings up to now, with the price ranging from CNY3,888 (USD564), CNY5,888 to CNY6,888. These fees could also be a means for financial institutions to screen customers, according to some experts.