China Great Wall Asset Management Corporation, one of the big four State-owned non-performing loan dealers, has expanded into financial leasing business in a move to transform into a commercial institution.

The corporation launched a financial leasing company, Xinjiang Great Wall Financial Leasing Co, yesterday after acquiring and restructuring Xinjiang Leasing Co Ltd with 519 million yuan.

This makes Great Wall the second State-owned financial asset manager to set foot in the financial leasing business following China Huarong Asset Management Corporation.

The leasing company, with Great Wall as the sole shareholder, provides the Stated-owned asset manager another platform in its commercialization reform process.

The new company will initially focus on finance leasing, provide asset management services and counseling for customers and other businesses approved by the China Banking Regulatory Commission, Great Wall said.

The leasing company inked financial leasing agreements worth 433 million yuan yesterday with seven enterprises including Xinjiang Guanghui (Group) Investment Co Ltd and Qingdao Meihua Xianxing Real Estate Co Ltd.

It also signed business cooperation agreements with nine financial institutions including the Industrial and Commercial Bank of China, Xinjiang branch.

Great Wall said it will introduce strategic investors into the new leasing company at an appropriate time.

By inviting strategic investors, the company said, it will build diverse equity structures for the leasing company, improve its operation mechanisms and build it into a modern financial enterprise.

Analysts said Great Wall is well suited to enter the leasing business.

"Asset managers have advantages in operating leasing businesses as they have huge client bases and strong liquidity flow," an analyst said.

With the support of regulators and their nationwide branches and manpower, the leasing business will become a new tool for asset managers to diversify incomes and achieve higher profits on their way to transform into commercial institutions, they said.

(China Daily February 20, 2008)