Another city firm plans to acquire a consumer finance company. On January 16, Bank Of Nanjing Co.Ltd(601009) announced that the bank planned to acquire the controlling interest of Suning Consumer Finance Co., Ltd. (hereinafter referred to as “Suning consumer finance”).
It is understood that Bank Of Nanjing Co.Ltd(601009) currently holds 15% of the shares of Suning Xiaojin. Up to now, the counterparty and transaction proportion of this acquisition have not been determined.
The reporter noted that not long ago, Bank Of Ningbo Co.Ltd(002142) just announced to take 70% equity of Huarong consumer finance from China Huarong at the transfer price of 1.091 billion yuan.
can exert a significant impact on Suning Xiaojin
In terms of equity structure, up to now, Suning.Com Co.Ltd(002024) , Xiansheng zaikon Jiangsu Pharmaceutical Co., Ltd., Bank Of Nanjing Co.Ltd(601009) , BNP Paribas personal finance and Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) hold 49%, 16%, 15%, 15% and 5% shares of Suning Xiaojin respectively.
Bank Of Nanjing Co.Ltd(601009) in the 2021 semi annual report, Suning Xiaojin is accounted as an associated enterprise. although the proportion of voting rights of the bank to Suning Xiaojin is less than 20%, the bank enjoys the seat on the board of directors of Suning Xiaojin, so it can exert significant influence on Suning Xiaojin.
As of June 30, 2021, Suning Xiaojin had a registered capital of 600 million yuan, total assets of 1.115 billion yuan and shareholders’ equity of 537 million yuan; From January to June 2021, the operating revenue was 106 million yuan and the net profit was – 34 million yuan.
In the same period, Suning Xiaojin’s total assets accounted for 0.07% of Bank Of Nanjing Co.Ltd(601009) total assets and shareholders’ equity accounted for 0.47%; From January to June 2021, Suning Xiaojin’s operating revenue accounted for 0.52% of Bank Of Nanjing Co.Ltd(601009) operating revenue. Bank Of Nanjing Co.Ltd(601009) said that if the subsequent acquisition is successful, the acquisition will have little impact on the company’s operating conditions.
It is reported that up to now, Bank Of Nanjing Co.Ltd(601009) the acquisition counterparty and transaction proportion have not been determined. The bank 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.
Bank Of Nanjing Co.Ltd(601009) said that the bank plans to negotiate the equity transfer with some shareholders of Suning Xiaojin. If the subsequent transfer is successful, the company is expected to obtain the controlling stake of Suning Xiaojin.
The reporter noted that in May 2019, Yunnan banking and Insurance Regulatory Bureau approved Yunnan Hongta bank to invest and participate in Suning Xiaojin, with a shareholding of 240 million shares and a shareholding ratio of 15%. However, no further action of Hongta bank’s shareholding was seen in the follow-up, and the ownership structure of Suning Xiaojin has not changed.
In terms of Bank Of Nanjing Co.Ltd(601009) , in recent years, the bank has been making continuous efforts in consumer finance business. As early as 2007, the bank and cetelem, a wholly-owned subsidiary of its strategic partner, jointly established the retail consumer credit center, which is the earliest predecessor of Bank Of Nanjing Co.Ltd(601009) consumer finance center (CFC). Since then, the strategic position of the bank’s consumer finance business has become increasingly prominent and the development model has become increasingly clear.
By the end of June 2021, Bank Of Nanjing Co.Ltd(601009) consumer finance center had a consumer loan balance of 44.9 billion yuan, added 1.54 million customers, served nearly 22.5 million customers in total, and the non-performing loan rate on the balance sheet was 1.22%.
city commercial banks actively layout consumer finance companies
According to the development report of China Consumer Finance Corporation (2021) issued by Bank Of China Limited(601988) Industry Association, by the end of 2020, the asset scale of consumer finance companies had exceeded 500 billion yuan for the first time, reaching 524.649 billion yuan, a year-on-year increase of 5.18%; The balance of loans was 492.78 billion yuan, a year-on-year increase of 4.34%; A total of 163.3947 million customers were served (the data of various institutions were aggregated without excluding duplication), with a year-on-year increase of 28.37%.
Public information shows that at present, the number of licensed consumer finance companies has increased to 30, banking consumer finance companies account for the majority, and the profit differentiation is more obvious.
City commercial banks are also actively arranging consumer finance companies. At the end of 2021, Bank Of Ningbo Co.Ltd(002142) announced to win 70% equity of Huarong consumer finance at the transfer price of RMB 1.091 billion. In addition, Bank Of Beijing Co.Ltd(601169) , Bank Of Shanghai Co.Ltd(601229) , Bank Of Jiangsu Co.Ltd(600919) also took shares in consumer finance companies. According to qixinbao, Bank Of Beijing Co.Ltd(601169) holds 35.29% equity of Bob consumer finance, and is its largest shareholder; Bank Of Shanghai Co.Ltd(601229) holds 38% equity of Shanghai Shangcheng consumer finance; Bank Of Jiangsu Co.Ltd(600919) holds 50.1% equity of Suyin Kaiji consumer finance.
According to Su Xiaorui, senior analyst of Analysys, the consumer finance license is favored by regional banks. First, the retail business corresponding to the consumer finance company license can form synergy and complementarity with the bank’s own business, which is of great significance to the bank’s own development of large retail strategy; Second, because the license of consumer finance company has national exhibition qualification, it has more advantages than the regional bank’s own regional status, and can play an important role in the scale expansion of regional banks, especially the head regional banks.
In fact, in recent years, under the regulatory requirements, the off-site exhibition industry of urban commercial banks has been constrained. In February 2021, the CBRC issued the notice on further standardizing the Internet loan business of commercial banks, which proposed to strictly control cross regional operations and made it clear that local corporate banks should not carry out Internet loan business across the jurisdiction of registration. Some people in the banking industry said that the reason why urban commercial banks actively layout consumer finance companies is also intended to break through regional restrictions, so as to achieve flexible development.
