For several years, the dream of gold consumption license of trillion city commercial firms came true.
on December 27, China Huarong announced that it was publicly listed and sold through the Beijing financial assets exchange, and finally transferred 70% equity of Huarong consumer finance to Bank Of Ningbo Co.Ltd(002142) at the transfer price of 1.091 billion yuan. A few hours later, Bank Of Ningbo Co.Ltd(002142) announcement showed that the board of directors of the bank unanimously approved the equity investment proposal.
“Huarong is accelerating the disposal of its assets. For several years, Bank Of Ningbo Co.Ltd(002142) has sought to expand its consumer finance license and extend its retail territory. The realization of equity investment is undoubtedly ‘efficient’, not to mention that it is a strong bidder.” A senior practitioner of huadongcheng firm told the Chinese reporter of the securities firm that the news had been circulating in the industry for a little half a year. It is not surprising that Bank Of Ningbo Co.Ltd(002142) pocketed Huarong consumer finance license at a price 50% higher than the transfer reserve price.
According to regulatory requirements, during this year, Huarong assets should return to the main business of non-performing assets disposal and dispose of its licensed institutions and domestic subsidiaries as soon as possible to fill bad debts and reduce the consumption of the parent company’s net capital. On December 24, ant Consumer Finance disclosed its share expansion plan to increase its capital to 30 billion yuan. China Cinda, one of the four AMCs, and its Nanyang Commercial Bank, became the second largest shareholder by holding more than 24% of the total capital increase, while China Huarong’s shareholding ratio was diluted to 1.331% from the previous 4.99%.
Bank Of Ningbo Co.Ltd(002142) won huarongxiao financial holding
China Huarong announced on the Hong Kong stock exchange that the company signed the unlisted state-owned property rights trading contract for financial enterprises with the transferee Bank Of Ningbo Co.Ltd(002142) on the same day, and planned to transfer 70% equity of Huarong Consumer Finance Co., Ltd. (hereinafter referred to as “Huarong consumer finance”) to the other party. This equity transfer was publicly listed and sold through Beijing financial assets exchange.
Earlier, on August 2, China Huarong announced that it planned to transfer 70% of the equity of Huarong consumer finance. Three months later, the transfer project was officially listed in Beijing financial assets exchange, with a transfer reserve price of about 727 million yuan. According to the listing announcement, after the equity transfer is completed, the transferee must provide liquidity support / shareholder deposits to Huarong consumer finance, and Huarong consumer finance shall return the principal and interest of the shareholder deposits of the transferor in full.
The announcement shows that the initial listing price is the asset appraisal result filed by the Ministry of finance of the people’s Republic of China, and the benchmark date is June 30, 2021. The registered appraisal price of all shareholders’ equity of Huarong consumer finance is 1038617500 yuan (RMB, the same below); The appraisal price of Huarong consumer finance equity transferred this time is 727032300 yuan.
The final transfer price of the equity transfer determined through online bidding in Beijing financial assets exchange is 109.10323 million yuan. This also means that through market bidding, Bank Of Ningbo Co.Ltd(002142) will collect the gold consumption license at a price 50% higher than the transfer base price.
The Chinese reporter of securities firm noted that a few hours after China Huarong’s announcement, Bank Of Ningbo Co.Ltd(002142) released the resolution of the fifth interim meeting of the seventh board of directors in 2021. The announcement showed that the board of directors of the bank unanimously considered and approved the proposal on Bank Of Ningbo Co.Ltd(002142) foreign equity investment and agreed that the company would transfer 70% equity of Huarong consumer finance with RMB 1.091 billion.
The equity transfer still needs the approval of relevant regulatory authorities. The announcement pointed out that after obtaining the approval of relevant regulatory authorities, China Huarong and Bank Of Ningbo Co.Ltd(002142) will jointly handle the registration of equity change and complete the necessary operation processes such as industrial and commercial change.
“Huarong is accelerating the disposal of its assets. For several years, Bank Of Ningbo Co.Ltd(002142) has sought to expand its consumer finance license and extend its retail territory. The realization of equity investment is undoubtedly ‘efficient’, not to mention that it is a strong bidder.” A senior practitioner of huadongcheng commercial bank told the Chinese reporter of the securities firm that as a consumer finance company registered in Hefei, Anhui Province, its bidder was not only Bank Of Ningbo Co.Ltd(002142) in the process of equity transfer, but it was not surprising that Bank Of Ningbo Co.Ltd(002142) finally pocketed Huarong consumer finance license at a price 50% higher than the transfer base price.
On August 2 this year, China Huarong issued the announcement on the planned implementation of Huarong consumer finance equity transfer and Huarong Trust equity restructuring project, which made it clear that it would return to its origin and main business. For Huarong consumer finance, China Huarong chose to give up completely. China Huarong said in the announcement that according to the requirements of the regulatory authorities for the gradual withdrawal of financial asset management companies from non main businesses, the company plans to transfer all the equity of Huarong consumer finance held by legally established property right trading institutions above the provincial level (including the provincial level), accounting for 70%, with a total of 630 million shares.
why do trillion City firms love this license?
Bank Of Ningbo Co.Ltd(002142) has been planning to expand the financial license for a long time.
As early as June 2018, Bank Of Ningbo Co.Ltd(002142) signed the investment agreement with Ningbo Fubang Jingye Group Co.Ltd(600768) furniture and Ningbo Fuda Company Limited(600724) Ningbo City Plaza, which plans to jointly initiate the establishment of YONGYING Consumer Finance Co., Ltd. According to the announcement, the proposed registered capital of YONGYING Xiaojin is 500 million yuan; Bank Of Ningbo Co.Ltd(002142) invested 300 million, accounting for 60%.
But YONGYING Xiaojin has no following. In March 2020, Ningbo Fuda Company Limited(600724) announced that by the end of 2019, the intention of the subsidiary City Plaza to participate in YONGYING consumer finance had not been approved by the CBRC, so it would no longer invest. But Bank Of Ningbo Co.Ltd(002142) has not given up its application for consumer finance license. In May 2020, Bank Of Ningbo Co.Ltd(002142) also publicly stated that the company is actively striving for the establishment of a consumer finance company.
Previously, Bank Of Ningbo Co.Ltd(002142) mentioned in the proposal on Bank Of Ningbo Co.Ltd(002142) foreign equity investment that according to the strategic planning and development requirements of the company, the company plans to invest no more than 5 billion yuan and take shares in a company including but not limited to trust and consumer finance company by means of equity investment and shareholding ratio of no less than 51%.
took several years and Bank Of Ningbo Co.Ltd(002142) won Huarong Xiaojin through equity investment.
“Xiaojin license can realize national exhibition without regional restrictions, which has obvious advantages.” In the view of insiders, this urban commercial bank with a scale of trillion yuan and retail strength at the head can break the regional geographical space restrictions and extend its retail territory by taking control of Huarong consumer finance.
“New customers of consumer finance companies expand rapidly, and new customers make a high contribution to the business scale. As an increasing incremental market, consumer finance is an effective supplement to the long tail customer base of bank consumer finance.” “On the other hand, under the situation of regulating the market, consumer finance ‘licenses’ with advantages in capital leverage and national exhibition industry are also favored by market subjects,” the above huadongcheng commercial bank told reporters
According to the financial report of , Bank Of Ningbo Co.Ltd(002142) currently has three subsidiaries of non bank financial institutions, namely YONGYING financial leasing, YONGYING fund and ningyin financial management. The total registered capital of the three institutions is 6.4 billion yuan, and the net profit in 2020 will reach 1.314 billion yuan, contributing more than 8% of the total net profit in Bank Of Ningbo Co.Ltd(002142) 2020. In addition, Bank Of Ningbo Co.Ltd(002142) also owns one Jijin company (YONGYING asset management) and one private equity venture capital institution (Zhejiang Yongxin asset management).
In terms of development strategy, Bank Of Ningbo Co.Ltd(002142) has publicly stated for many times that it adheres to the strategy of “big banks can’t do well, small banks can’t do well”, accelerates customer group coverage, continues to accumulate comparative advantages in differentiated market segments, continues to improve the differentiated competitiveness of the company in financial business, national capital business, retail company business and wealth management business, and speeds up the construction of business moat.
By the end of 2020, Bank Of Ningbo Co.Ltd(002142) managed financial management, funds, asset management plans and private equity funds accounted for 28.54% of its total assets, far exceeding the peers of urban commercial banks.
intensive capital increase of “hot” consumer finance companies
from the perspective of revenue efficiency and scale, Huarong consumer finance is not bright in its peers.
In terms of performance, the revenue and profit of Huarong consumer finance fluctuated greatly. From 2016 to 2019, the total revenue of Huarong consumer finance was 90.1 million yuan, 766 million yuan, 1.201 billion yuan and 1.029 billion yuan respectively, and the profits were – 37 million yuan, 128 million yuan, 16.8 million yuan and – 263 million yuan respectively. Since last year, Huarong consumer finance has turned losses into profits, with an operating revenue of 1.101 billion yuan and a net profit of 06.4 million yuan in 2020; In the first half of this year, the profit was about 05.6 million yuan.
Huarong consumer finance was established in January 2016. Its shareholders include China Huarong, Hefei Department Store Group Co.Ltd(000417) building, Shenzhen Huaqiang Industry Co.Ltd(000062) and Anhui Xin’an assets, with an initial registered capital of 600 million yuan. After the capital increase is completed by the end of 2019, the registered capital will increase to RMB 900 million, and the shareholding ratio of Huarong assets, the largest shareholder, will increase to 70%; II. The shareholder Hefei Department Store Group Co.Ltd(000417) gave up the capital increase and the shareholding ratio decreased to 15.33%.
In addition, since its establishment, Huarong Xiaojin executives have changed quite frequently. In April 2021, Huarong Xiaojin welcomed the new chairman Liu Hui.
According to incomplete statistics by Chinese reporters of securities companies, up to now, 33 licensed consumer finance companies have been approved to build in China. The total assets of 12 consumer finance companies are more than 10 billion, accounting for more than 70%; There are ant consumer finance, Zhaolian consumer finance, home credit consumer finance, instant consumer finance, industrial consumer finance and BOC consumer finance.
According to the latest report of Bank Of China Limited(601988) Industry Association, by the end of 2019, the asset scale of 26 consumer finance companies had reached 498.807 billion yuan, a year-on-year increase of 28.67%; The balance of loans was 472.293 billion yuan, an increase of 30.5% over the previous year.
In addition to the rapid growth of scale, the number of users also maintained growth. By the end of 2019, the number of customers of consumer finance companies was 127.2792 million, an increase of 52.29% over the same period of last year, with a significant increase in customers. Up to 50% of consumer finance companies accounted for more than 60% of their total loan balance in 2019.
Therefore, compared with last year, including Xiaomi consumer finance, Beijing Sunshine consumer finance, Chongqing ant Consumer Finance Co., Ltd., vipshop Fubang consumer finance company and Suyin Kaiji consumer finance company have been approved to prepare for construction or start business. Since this year, consumer finance companies have shown a “wave of capital increase”.
Since this year, consumer finance companies have “replenished blood” through shareholder capital increase, financial bonds, syndicated loans, ABS and other ways. For example, Hubei consumer finance, home credit consumer finance, industrial consumer finance, China post consumer finance and Bank of Hangzhou consumer finance have successively issued ABS products ranging from 1 billion yuan to 6 billion yuan to raise funds; Zhaolian consumer finance and instant consumer finance successfully issued financial bonds; In addition, immediately consumer finance successfully raised the first syndicated loan and completed the withdrawal of 530 million yuan; China post consumer finance completed syndicated loans in 2021, with a total amount of 1.4 billion yuan. Since the beginning of this year, Bank of Hangzhou Xiaojin, Bank of Jiangsu Kaiji consumer finance, Zhaolian Xiaojin and ant consumer finance have all increased their capital.
“under the guidance of supervision, the consumer finance industry in the past two years has been looking for direction and transformation; the new regulatory situation and new rules have brought changes in the scope of exhibition and business licensing norms, which will bring more cooperation opportunities to companies with high business digitization and stable foundation.” According to the analysis of the co-founder of China concept stock of East China financial technology to the Chinese reporter of the securities firm, with the recovery of China’s economy after the epidemic, the growth of the new consumption economy and the overall positive trend of the asset quality of the industry, we are optimistic about the potential and Prospect of consumer finance companies with stable business.
(brokerage China)
