City commercial banks actively layout consumer finance licenses.
Recently, Bank Of Nanjing Co.Ltd(601009) announced that it plans to acquire the controlling interest of Suning Consumer Finance Co., Ltd., but no equity transfer agreement has been signed, and the subsequent acquisition needs to be approved by the regulatory authority. Insiders believe that Bank Of Nanjing Co.Ltd(601009) was originally the shareholder of Suning Xiaojin. This time, it seeks to hold shares in order to improve the layout of retail business.
The data show that among the 30 consumer finance companies currently operating, 14 have the background of shareholders of urban commercial banks. In addition, at the end of last year, Bank Of Ningbo Co.Ltd(002142) also announced the transfer of 70% equity of Huarong consumer finance company held by China Huarong.
Bank Of Nanjing Co.Ltd(601009) the share price rose continuously at the beginning of the year, but fell 3.27% to close at 9.48 yuan last Friday, with the latest total market value of 94.9 billion yuan.
Bank Of Nanjing Co.Ltd(601009) proposed acquisition of Suning Financial Holdings
Bank Of Nanjing Co.Ltd(601009) announced on January 16 that the company plans to acquire the controlling interest of Suning Consumer Finance Co., Ltd. Up to now, the counterparty and transaction proportion of this acquisition have not been determined, and the company has not signed an equity transfer agreement with any shareholder of Suning Xiaojin, and the subsequent acquisition needs to be approved by the regulatory authority.
In fact, a few days ago, on January 13, Bank Of Nanjing Co.Ltd(601009) issued an announcement. The board of directors of the company deliberated and unanimously approved the proposal on acquiring the controlling right of participating financial institutions. At that time, the market speculated that Suning consumer finance was to be controlled, which was officially announced this time.
With regard to the impact of the acquisition, Bank Of Nanjing Co.Ltd(601009) said that as of June 30, 2021, the total assets of Suning Xiaojin accounted for 0.07% of the company’s total assets and shareholders’ equity accounted for 0.47%; From January to June 2021, Suning Xiaojin’s operating revenue accounted for 0.52% of the company’s operating revenue and its net profit accounted for – 0.40%. If the subsequent acquisition is successful, this acquisition will have little impact on the company’s operating conditions and will not have a significant impact on the company’s operating results.
However, the announcement also reminds that up to now, Bank Of Nanjing Co.Ltd(601009) has not signed an equity transfer agreement with any shareholder of Suning Xiaojin, and the subsequent acquisition needs to be approved by the regulatory authority. There is great uncertainty in the signing of the agreement and regulatory approval. Please pay attention to the investment risk.
If the acquisition plan is successfully completed, in the future Bank Of Nanjing Co.Ltd(601009) will have a consumer finance license and actively promote the field of consumer finance.
Suning’s consumer finance performance is average
Let’s take a look at the acquisition object of Bank Of Nanjing Co.Ltd(601009) . Suning Consumer Finance Co., Ltd. was established in May 2015 and currently has a registered capital of 600 million yuan. Its largest shareholder is Suning.Com Co.Ltd(002024) , holding 49% of the shares; Xiansheng zaikang Jiangsu Pharmaceutical Co., Ltd. holds 16% of the shares and is the second largest shareholder; Bank Of Nanjing Co.Ltd(601009) and BNP Paribas personal finance hold 15% shares respectively and are listed as the third largest shareholder; And Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) holds 5% of the shares.
Suning consumer finance has not performed well in recent years. From 2016 to 2020, the net profit of Suning consumer finance was -189 million yuan, 217 million yuan, 45.321 million yuan, 10.112 million yuan and – 49.718 million yuan respectively.
According to public information, as of June 30, 2021, Suning’s total consumer financial assets were RMB 1.115 billion and shareholders’ equity was RMB 537 million; From January to June 2021, the operating revenue was 106 million yuan and the net profit was – 34 million yuan.
In fact, according to media reports, previously Bank Of Nanjing Co.Ltd(601009) wanted to apply for the establishment of a consumer finance company, but there was no further news later.
Industry insiders said that the cycle of self built consumer finance companies is longer. It is better to directly acquire established consumer finance companies. They have a certain foundation in terms of customers, business model, science and technology system, etc. Moreover, in recent years, the consumer finance industry has ushered in strict regulatory norms. It is not easy to apply for an approved consumer finance license.
Now, the controlling shareholder Suning.Com Co.Ltd(002024) of Suning consumer finance company has encountered operating difficulties and is constantly selling assets, which also gives Bank Of Nanjing Co.Ltd(601009) an opportunity.
In addition, Bank Of Ningbo Co.Ltd(002142) recently transferred 70% equity of Huarong consumer finance held by China Huarong for RMB 1.091 billion through equity transfer, or will obtain a consumer finance license.
why do city commercial banks actively layout consumer finance licenses?
Relevant statistics show that among the 30 consumer finance companies currently in operation, there are 19 banking consumer finance companies, of which 14 have the background of shareholders of urban commercial banks (PS: not including Bank Of Nanjing Co.Ltd(601009) , Bank Of Ningbo Co.Ltd(002142) ), including Bank Of Beijing Co.Ltd(601169) , Bank Of Shanghai Co.Ltd(601229) , Bank Of Jiangsu Co.Ltd(600919) and other leading urban commercial banks, as well as Bank Of Hangzhou Co.Ltd(600926) , Zhongyuan bank, Shengjing bank, Shanxi commercial bank, Zhangjiakou bank, etc.
As for why urban commercial banks actively obtain consumer finance licenses, senior bankers analyzed that there may be several reasons: first, under the background of economic downturn and interest rate marketization, urban commercial banks actively make efforts to layout retail business and expand wealth management business. Consumer finance business has developed rapidly in recent years. Obtaining relevant licenses will help banks broaden their retail business territory, Improve the layout; Second, in February last year, the China Banking and Insurance Regulatory Commission issued the notice on further regulating the Internet loan business of commercial banks, requiring strict control over cross regional operation and making it clear that local corporate banks are not allowed to carry out Internet loan business across the jurisdiction of their registration. In the past, the way of cross regional operation of urban commercial banks with the help of Internet platform was limited, and consumer finance companies are national licenses, It can operate across regions and highlight the value of the license.
Industry insiders believe that although the consumer finance industry faces multiple challenges in the future, it is still a blue ocean. In recent years, some non licensed institutions have been vigorously rectified and dismissed, and strict regulatory policies have been issued frequently. Licensed consumer finance companies have broader development space. According to the CICC report, with the gradual improvement of the credit investigation system and the joint pull of both supply and demand, it is estimated that the consumer credit balance of Chinese residents (excluding housing loans) is expected to reach 28 trillion yuan in 2025.
At present, the bank is a consumer finance company. Zhaolian consumer finance under China Merchants Bank Co.Ltd(600036) is the only company with total assets exceeding 100 billion yuan. As of the first half of 2021, the total assets of Zhaolian consumer finance were 129.84 billion yuan. However, Suning consumer finance company did not perform well, and its net profit in the first half of 2021 was negative.
For Bank Of Nanjing Co.Ltd(601009) , if the acquisition of control is successful, it will complement a puzzle of retail financial business, but the future depends on its ideas and layout for developing retail business and how to stimulate the vitality of Suning consumer finance company.
In recent years, Bank Of Nanjing Co.Ltd(601009) retail business has developed rapidly. The financial report shows that as of the end of June last year, Bank Of Nanjing Co.Ltd(601009) retail customer AUM (scale of financial assets under management) has reached more than 530 billion yuan, an increase of more than 50 billion yuan over the beginning of the year, an increase of 10%; Personal deposits exceeded 230 billion yuan, an increase of more than 25 billion yuan over the beginning of the year, an increase of more than 12%.
From the stock price performance, Bank Of Nanjing Co.Ltd(601009) the stock price fluctuated greatly in recent years, but since the beginning of this year, several positive lines have been pulled out continuously, rising from around 9 yuan to the highest 9.89 yuan. On Friday, it closed down by 3.27% to 9.48 yuan, and the latest total market value was 94.9 billion yuan
