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CITIC LIMITED
Notes to the Consolidated Financial Statements
For the six months ended 30 June 2016
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34 Structured entities
(continued)
(c) Structured entities sponsored by the Group which the Group does not
consolidate but holds an interest
The investments issued by unconsolidated structured entities sponsored by the Group are primarily
wealth management products and trust plans without principal and/or return guarantee. The nature
and purpose of these structured entities are for the Group to generate fees from managing assets
on behalf of investors. These structured entities are financed through the issuance of products to
investors. Interest held by the Group includes fees charged by providing management services and
investment made by the Group.
Wealth management products and trust plans
As at 30 June 2016, the aggregate amount of assets held by the unconsolidated non-principal-
guaranteed wealth management products and trust plans which are sponsored by the Group was
HK$2,185,222 million (31 December 2015: HK$1,977,449 million).
As at 30 June 2016, the carrying amounts of management fee receivables being recognised in the
balance sheet were HK$679 million (31 December 2015: HK$650 million.)
As at 30 June 2016, the amount of placements from the Group with non-principal-guaranteed
wealth management products sponsored by the Group was HK$32,878 million (31 December 2015:
HK$30,158 million).
During the six months ended 30 June 2016, the maximum exposure of the placements from the
Group with non-principal guaranteed wealth management products sponsored by the Group
was HK$47,529 million (six months ended 30 June 2015: HK$38,246 million). In the opinion of
management, these transactions were conducted in the ordinary course of business under normal
terms and conditions and at market rates.
During the six months ended 30 June 2016, the amount of fee and commission income recognised
from the above mentioned structured entities sponsored by the Group was HK$6,786 million (six
months ended 30 June 2015: HK$5,056 million).
Securitisation vehicle
CITIC Bank enters into securitisation transactions in the normal course of business by which it
transfers credit assets to structured entities which issue asset-backed securities to investors. CITIC
Bank may retain interests in the form of subordinated tranches which would give rise to CITIC Bank’s
retention of risk and rewards on the transferred assets. CITIC Bank will assess whether to derecognise
the assets or not based on the extent of risks and rewards retained. For the six months ended 30
June 2016, CITIC Bank has derecognised loans and advances of HK$1,585 million in the asset-backed
securitisation transactions (six months ended 30 June 2015: Nil). As at 30 June 2016, CITIC Bank
neither transferred nor retained substantially all risks and rewards of ownership of certain transferred
assets and retained the control of the transferred assets. CITIC Bank recognised HK$577 million in
both assets and liabilities representing its continuing involvement in this connection (31 December
2015: HK$341 million). In addition, CITIC Bank also disposed of its loans and advances to customers in
the ordinary course of business during the six months ended 30 June 2016.