China Huarong Asset Management Co Ltd announced on Tuesday the Ministry of Finance intended to make a capital contribution of 2,407,400,372 domestic shares it held in the company, or 3 percent of the total issued shares of the firm, to CITIC Group Corp.

After the changes, CITIC Group will become the largest shareholder of China Huarong, holding a 26.46 percent stake in the State-owned financial asset management company. The MOF will hold a 24.76 percent stake.

CITIC Group has strong market competitiveness in financial and industrial sectors. Its licensed financial subsidiaries are leading companies in their own specialized areas, with obvious competitive advantages in talent, products, clients and channels, Liang Qiang, president of China Huarong, said at a news conference announcing the company's annual results on Tuesday.

"China Huarong will focus on its primary business－the nonperforming assets business－after completing transfers of equities in its licensed financial subsidiaries. We will form strong complementarity and synergy with various segments and institutions of CITIC Group by giving full play to our advantages in distressed assets disposal, troubled company bailouts and risk defusion. Both parties will endeavor to provide a package of all-around financial solutions to our clients, to complete the tasks of serving the real economy, preventing and mitigating financial risks, and deepening financial reforms," Liang said.

The company transferred its equity of 79.6 percent holding in Huarong Zhongguancun Distressed Asset Exchange Center Co Ltd to Banking Credit Asset Registration and Circulation Center Co Ltd last year.

It agreed to transfer a 70 percent stake in Huarong Consumer Finance Co Ltd to Bank of Ningbo and a 71.99 percent stake in Huarong Securities Co Ltd to Guoxin Capital Co Ltd.

It is also pushing forward transfers of equities in five other licensed financial subsidiaries, including Huarong Xiangjiang Bank Co Ltd, China Huarong Financial Leasing Co Ltd and Huarong International Trust Co Ltd, in an orderly manner, said Xu Yongli, vice-president of the company.

"Our current top priority is to insist on high-quality development rather than pursuing large scale of business and rapid growth like we used to. Next, we will invest the capital recovered from our transfers of equities in licensed financial subsidiaries in our nonperforming assets business and deepen regional, product and client restructuring based on achieving a moderate size of our primary business. In addition to stepping up efforts to dispose of nonperforming financial assets, we will also pay close attention to new growth points of business, including distressed assets revitalization in real estate companies, the restructuring of troubled companies, optimization of energy and resources companies, and risk mitigation in small and medium-sized financial institutions," said Liang.

China Huarong reported a 378.5-million-yuan ($59.43 million) profit attributable to equity holders of the company in 2021, compared with a loss of 102.9 billion yuan in 2020.

As of Dec 31, total assets of the company and its subsidiaries reached nearly 1.57 trillion yuan, down 4.4 percent year-on-year. Among the total, distressed debt assets fell by 17.2 percent to 292.35 billion yuan.