On January 13, Bank Of Nanjing Co.Ltd(601009) announced the contents of the meeting of the board of directors and the board of supervisors on that day. Among them, a proposal on the acquisition of controlling shares in participating financial institutions has attracted attention. The reporter learned from various sources that the “protagonist” of the Bank Of Nanjing Co.Ltd(601009) proposal on the acquisition of the controlling stake in participating financial institutions may be Suning Consumer Finance Co., Ltd.
Not long ago, Bank Of Ningbo Co.Ltd(002142) also won Huarong consumer finance. As the first listed “old three” city commercial banks, Bank Of Beijing Co.Ltd(601169) and Bank Of Ningbo Co.Ltd(002142) have their own consumer finance licenses, and Bank Of Nanjing Co.Ltd(601009) also intends to follow up this trend, but the follow-up remains to be further regulated.
” Bank Of Nanjing Co.Ltd(601009) ‘s gold consumption field is actually vigorous and regretful. The core competitiveness lies in mode and risk control, which is the key.” A person close to the bank told the Chinese reporter of the securities firm that the market space after licensing is larger than that of internal business institutions.
A senior City firm told the Chinese reporter of the securities firm that it can broaden the territory of financial business for the city firm. As an incremental market, the field of consumer finance is also regarded as a blue ocean. “At present, if the” regular army “of commercial banks with perfect risk control system can intensively cultivate this market, it can not only promote the further standardization and order of the industry, but also make considerable profit contribution to the company level.” Industry insiders pointed out.
follow the trend of “old three” city commercial banks
The resolution of the 9th meeting of the 9th board of directors was announced on Bank Of Nanjing Co.Ltd(601009) 13. In addition to announcing that the bank has obtained no fixed-term capital bonds of no more than 20 billion yuan, the bank voted and passed a proposal on the acquisition of controlling shares in participating financial institutions.
The announcement shows that the acquisition has yet to sign a formal agreement, and the follow-up needs to be approved by the regulatory authority. “The signing of the agreement and regulatory approval are uncertain. Please pay attention to the investment risk.” The announcement said.
The reporter learned from various sources that the “protagonist” of the Bank Of Nanjing Co.Ltd(601009) proposal on the acquisition of the controlling stake in participating financial institutions may be Suning Consumer Finance Co., Ltd. Up to now, the direct shareholding ratio of Bank Of Nanjing Co.Ltd(601009) in public information for Suning consumer finance is 15%.
According to public data, in 2015, Bank Of Nanjing Co.Ltd(601009) jointly initiated the establishment of Suning Consumer Finance Co., Ltd. with Suning yunshang, France Pakistan personal finance group, Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) and Xiansheng zaikang. The company is the first non bank financial institution in Jiangsu to focus on the field of consumer finance. By the end of 2020, the company had a registered capital of 600 million yuan, total assets of 2.542 billion yuan, net assets of 720 million yuan, annual net profit of 08 million yuan, Bank Of Nanjing Co.Ltd(601009) held 15% of its shares.
In fact, since 2007, Bank Of Nanjing Co.Ltd(601009) has continuously and deeply promoted the business cooperation with BNP Paribas in the field of consumer finance (CFC), closely followed the changes and development of China’s consumer finance market, carried out characteristic population analysis, and comprehensively built the ability of digital marketing, digital risk control and digital operation.
In fact, as early as the 2020 annual report, we can see Bank Of Nanjing Co.Ltd(601009) ‘s attitude at the level of consumer finance business. At that time, the bank’s financial report showed that the consumer finance business actively adapted to market and policy changes, accelerated business structure adjustment, strengthened asset quality control, and continuously improved the level of marketing, operation and risk management. Timely adjust the online financial business strategy and deeply cultivate the fine operation of Internet customers.
financial territory or further expand
” Bank Of Nanjing Co.Ltd(601009) ‘s gold consumption field is actually vigorous and regretful. The core competitiveness lies in mode and risk control, which is the key.” A person close to the bank told the Chinese reporter of the securities firm that the market space after licensing is larger than that of internal business institutions.
From the perspective of commercial banks, if we can gradually promote the wholly-owned acquisition of consumer finance subsidiaries, it will inevitably mean the further expansion of the financial territory of the banking institution. “The subsidiary of consumer finance retail is of great significance to banks.” Some analysts told reporters.
A senior City Commercial Bank practitioner told the Chinese reporter of the securities firm that there are actually multiple factors behind the banks’ active pursuit of consumer finance licenses: on the one hand, among the consumer finance companies held by banks, the grasp of risk control at the business level is relatively mature; On the other hand, the market in the field of consumer finance is relatively large, which can be said to be a blue ocean at present.
As one of the earliest listed urban commercial banks, Bank Of Ningbo Co.Ltd(002142) won Huarong consumer finance not long ago, and Bank Of Nanjing Co.Ltd(601009) , also rooted in Jiangsu and Zhejiang, also intends to seek the possibility of expanding its business in this scope.
According to the semi annual report of 2021, as of the end of the reporting period, CFC’s consumer loan balance was 44.9 billion yuan, 1.54 million new customers were added, nearly 22.5 million customers were served, and the non-performing loan rate on the balance sheet was 1.22%. It can be seen from its financial report that the profitability of the consumer financial center is strong. Some city commercial bank analysts pointed out to reporters that due to the bank’s small high-frequency transactions, the bad parts can be controlled by pricing.
“In the future, the core competitiveness of consumer finance companies held by banks lies in their feasible business model and excellent risk control ability. As for the customer level, it is not a problem.” A person from a major bank in East China also told the Chinese reporter of securities companies that the key lies in the risk control mode, such as the support of science and technology, and science and technology itself is the most dependent point of current financial technology.
In fact, insiders told reporters that since 2018, many consumer finance companies have focused on the construction of financial technology, such as big data risk control, financial AI, blockchain and so on, aiming to optimize the risk management system and achieve the goals of intelligent collection, anti fraud and accurate customer acquisition. However, in the face of fierce competition in the market and the impact of the overall economic environment brought by the epidemic, consumer finance companies are also seeking new development space.
On the other hand, as a licensed institution, the operation mode of consumer finance companies has been relatively mature after the development of recent years and the survival of the fittest in the market. After the horse racing enclosure, the market competition also focuses on the level of scientific and technological self-construction in the future.
overseas exhibition industry broken
From the back, the consumer finance license is national, which can achieve the national exhibition industry. “The remote exhibition industry will not be opened in the foreseeable future, which may also be the reason why several head city commercial banks strive to win the consumer finance license.” An industry analyst told the Chinese reporter of the securities company.
The Chinese reporter of securities companies learned that the current banking supervision is divided according to regions. If local banks break through the regional restrictions on deposit and loan business, it is no different from the national bank license, which will interfere with the order of the market itself.
In the fourth quarter of 2020 monetary policy implementation report released by the central bank, it is clearly proposed to include the absorption of deposits in different places by local corporate banks into MPa, prohibit the solicitation of deposits in different places through various channels, and the stock will be settled naturally upon maturity.
In 2021, the central bank repeatedly stated its position on restricting the non local development of local corporate banks. For example, a meeting on strengthening deposit management was held on February 4, 2021 to urge local corporate banks to return to serving the local origin and not to open non local deposits in various ways; Later, it was further clarified that non local deposits refer to the deposits absorbed by banks through opening accounts in prefectures and cities without physical online stores.
The aforementioned analysts told reporters that the core intention of supervision is to maintain the market order of the banking industry itself. With the prosperity of the Internet, in recent years, many local banks have broken the restrictions on the exhibition industry of the original physical outlets and their regions, opened up markets and obtained new customers. However, this trend has been gradually dispelled under the new deposit and loan regulations.
“Although some businesses of some small banks are limited, from the perspective of the whole financial system, it is the improvement of internal operation efficiency.” A senior banking practitioner told reporters that by regulating deposits and loans in other places and controlling the vicious competition at the interest rate level, what can finally be reflected in the real economy is the decline of financing costs.
In this context, it is undoubtedly a sharp weapon for local banking institutions to obtain a consumer finance license under their own control. For banks, expanding the application of consumer finance scenarios can be combined with their own large retail business.
“From another point of view, the field of Internet loans has been in the normative stage. In the case of the original \’bad money expels good money\’, financial chaos occurs frequently.” The above insiders further told reporters that at present, if the “regular army” of commercial banks with perfect risk control system can intensively cultivate this market, it can not only promote the further standardization and order of the industry, but also make considerable profit contribution to the company level.
consumer finance intensive capital increase
Many research reports pointed out that with the new consumption, new economy and other growth points, they are optimistic about the development of consumer finance companies under the scope of regulatory guidance.
According to incomplete statistics, at present, there are 33 national licensed consumer finance companies approved for establishment in China, including 12 companies including ant consumer finance, Zhaolian consumer finance and BOC consumer finance, with total assets of more than 10 billion.
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. Over the same period, the number of customers of Xiaojin company reached 127.2792 million, an increase of 52.29% over the same period last year, with a significant increase in customers.
Data show that in 2019 alone, nearly half of the new customer loan balances of consumer finance companies accounted for more than 60% of their total loan balances. Subsequently, Xiaomi consumer finance, Beijing Sunshine consumer finance, Chongqing ant Consumer Finance Co., Ltd., vipshop Fubang Consumer Finance Co., Ltd. and Suyin Kaiji Consumer Finance Co., Ltd. were successively approved for preparation or opening, and some of them completed capital increase after opening.
On the other hand, consumer finance companies are also increasing capital and “replenishing blood” in various ways. For example, Hubei consumer finance, home credit consumer finance and industrial consumer finance have 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, syndicated loans have also completed certain fund-raising for many consumer finance companies.
