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after three years, orient securities' absorption and merger of its investment banking subsidiary has finally made substantial progress.

on the evening of september 1, orient securities announced that it had recently received a reissued "securities and futures business license" from the china securities regulatory commission. effective september 2, the existing customers and business of orient securities underwriting and sponsoring co., ltd. (referred to as "orient investment bank") will be transferred and merged into orient securities.

oriental investment bank becomes history

in fact, orient securities' absorption and merger of orient investment bank is the first case in the securities industry in recent years where a main body absorbed and merged an investment bank subsidiary, and the process was initiated more than three years ago.

public information shows that the predecessor of oriental investment bank was oriental citi. oriental citi was established in june 2012 and was jointly invested and established by oriental securities and citigroup global markets (asia) limited. in 2019, oriental securities acquired all 33.33% of oriental citi held by citigroup, and realized full ownership of oriental citi. in 2020, oriental citi was renamed oriental investment bank.

in june 2021, orient securities planned to absorb and merge the company's wholly-owned subsidiary of investment banking business in order to further integrate resources, improve efficiency, and effectively enhance business development and comprehensive customer service capabilities. at the second extraordinary shareholders' meeting held on july 20, 2021, orient securities reviewed and approved the proposal to absorb and merge orient investment bank. at the end of november 2022, the china securities regulatory commission accepted orient securities' "securities company merger approval" materials.

in march 2023, the china securities regulatory commission disclosed the "approval on the approval of the absorption and merger of orient securities co., ltd. by orient securities underwriting and sponsoring co., ltd. and change of business scope", approving orient securities to absorb and merge orient investment bank. according to the "approval", after the absorption and merger is completed, orient investment bank will be dissolved, and the original orient investment bank beijing branch will be changed to orient securities beijing branch.

according to the latest announcement from orient securities on the evening of september 1, after a year and a half, the matter has once again made substantial progress.

orient securities announced that it recently received a new "securities and futures business license" from the china securities regulatory commission. the original business scope of "securities underwriting (limited to treasury bonds, local government bonds and other government bonds, policy bank financial bonds, and financing products supervised by the national association of financial market institutional investors (including but not limited to non-financial corporate debt financing instruments))" was changed to "securities underwriting and sponsorship", while other business scopes remain unchanged.

starting from september 2, 2024, the existing clients and businesses of the wholly-owned subsidiary oriental investment bank will be transferred and merged into oriental securities. the investment banking business projects undertaken by oriental investment bank will continue to be executed by oriental securities, all agreements signed by oriental investment bank will continue to be performed by oriental securities, and all the claims and debts of oriental investment bank will be inherited by oriental securities in accordance with the law.

orient securities also stated that the company will complete the membership and industrial and commercial cancellation of orient investment bank and other follow-up matters in accordance with the approval requirements of the china securities regulatory commission and in accordance with laws and regulations to ensure that the legitimate rights and interests of customers are not harmed. orient investment bank was a wholly-owned subsidiary of the company before the merger, and its financial statements have been 100% included in the company's consolidated statements. this merger will not have a substantial impact on the company, will not harm the interests of the company and its shareholders, and is in line with the company's development needs.

addressing business constraints

regarding the impact of absorbing and merging oriental investment bank, oriental securities has previously stated that there are two major benefits:

first, give full play to the advantages of the full license. after the completion of this absorption and merger, the problem of the division of the license of orient securities' investment banking business will be solved, which will help give full play to the advantages of the full license, improve business development efficiency, and further enhance the company's comprehensive financial service level.

second, it will solve the constraints of some indicators on business development. after the absorption and merger is completed, it will be able to effectively solve the impact and constraints of indicators such as liquidity risk on the development of investment banking business when oriental investment bank operates as a subsidiary.

it is understood that before the absorption and merger of oriental investment bank, orient securities mainly engaged in investment banking business through its wholly-owned subsidiary oriental investment bank and the company's fixed income business headquarters and investment banking business headquarters (in preparation). among them, oriental investment bank is mainly engaged in the underwriting and sponsorship of stocks, the underwriting of corporate bonds, enterprise bonds and financial bonds, mergers and acquisitions, restructuring and other related financial advisory services; the fixed income business headquarters is mainly engaged in the underwriting services of government bonds, policy financial bonds and non-financial corporate debt financing instruments; the neeq recommendation listing business will be transferred from oriental investment bank to the company's investment banking business headquarters (in preparation) in august 2022.

according to the 2024 semi-annual report of orient securities, in the first half of this year, the investment banking business had an operating income of 522 million yuan, accounting for 5.35%. according to wind data, orient currently has 12 investment banking projects, of which 3 have been accepted, 8 have been inquired, and 1 has been approved. at the same time, it is expanding industrial mergers and acquisitions; the debt underwriting projects involve 319 orders.

in its 2024 semi-annual report, orient securities stated that the company has formulated an action plan for "improving quality, increasing efficiency and focusing on returns" for 2024, actively serving the construction of shanghai's "five centers", effectively improving its resource allocation capabilities, making steady progress in operating performance, and maintaining a stable position in the industry. among them, the large investment banking business system is anchored in major national strategies, helping to cultivate new quality productivity and build the distinctive capabilities of science and technology investment banks and energy investment banks.

it is worth noting that after oriental investment bank became history, there are still 8 securities companies in the securities industry that conduct investment banking business through investment banking subsidiaries or subsidiaries. they are changjiang securities and changjiang securities underwriting and sponsoring, first capital and first capital investment bank, founder securities and founder securities underwriting and sponsoring, guolian securities and huaying securities, huatai securities and huatai united, shanxi securities and zhongde securities, shenwan hongyuan and shenwan hongyuan underwriting and sponsoring, hengtai securities and hengtai changcai, etc.