* GF Sec, CITIC Sec，Changjiang Sec post drop in 2016 profits
* CITIC plans cut in CLSA operating costs
* 2017 bright spots include bonds, IPOs, M&A
(Recasts with overview on brokerages; adds background on other
HONG KONG, March 24 (Reuters) - Chinese brokerages,
including the country's biggest, CITIC Securities Co Ltd
, reported a sharp drop in profits in 2016
as lacklustre stock market activity dragged down commission
Brokers in China have been struggling after a stock market
boom came to a turbulent end in 2015. The reality of continued
weakness on the Shanghai and Shenzhen markets has prompted some
brokerages to slash commissions and scale back staff benefits to
keep costs in check.
Two of China's top listed brokerages - GF Securities
and Changjiang Securities - saw their
2016 net profit dive 39.2 percent and 36.8 percent,
respectively, last week.
CITIC Securities posted its lowest annual profit in three
years, of 10.4 billion yuan, down 47.6 percent from 2015, as
lacklustre stock market activity pushed down net fee and
commission income by almost a quarter.
Amid bleak prospects at home, CITIC plans to cut operating
costs of its international arm, CLSA, by 25-30 percent, CLSA
Chairman Tang Zhenyi said on Friday. The brokerage also plans to
increase the revenue it gets from CLSA to 30 percent of its
total in five years, from 10 percent now, Tan said.
CITIC is looking to acquire advisory assets in the United
States and a deal could be announced by the end of this year,
CLSA Chief Executive Jonathan Slone said.
"We are looking at everything. But we are certainly in no
rush to acquire anything," Slone said.
Many Chinese brokers, highly dependent on trading fees, have
been badly hit by a 50 percent plunge in average daily turnover
in stocks and funds to 500 billion yuan last year, according to
a January report by Haitong Securities.
Government curbs on margin financing continued to weigh on
trading, while crackdowns on property-related and other
structured products also hit revenues.
"Asset management ... is shrinking under the management of
the China Insurance Regulatory Commission," said Jiahe Chen,
chief strategist at Cinda Securities.
One of last year's worst performers was Shanxi Securities
, whose annual profits cratered 67.8 percent,
preliminary results show. The brokerage said it plans to issue
public corporate bonds worth 2 billion yuan.
However, this year, bond issues, IPOs as well as mergers and
acquisitions will remain bright spots for China's brokerages,
according to analysts.
(Reporting by Julie Zhu in Hong Kong and Engen Tham in
Shanghai; Writing by Sumeet Chatterjee in Hong Kong; Additional
reporting by Lawrence White in London; Editing by Himani Sarkar
and Leslie Adler)