The Paper's reporter Chen Peizhen
Recently, Orient Jincheng International Credit Appraisal Co., Ltd. (hereinafter referred to as "Oriental Jincheng") released a rating report on Huatong Bank, the first private bank in Fujian, pointing out that benefiting from the in-depth cooperation with the Internet platform, China's private banking business has developed rapidly, and some Internet private banks have performed better in profitability, but with the tightening of Internet deposit and loan regulatory policies, private banks will continue to be under pressure in terms of business expansion and future profits.
Judging from the performance of the two private banks that have announced the three quarterly reports, in the third quarter of this year, the growth of the two private banks in the deposit business is weak. In addition, the surging news found that since the beginning of this year, a number of private banks have been fined by supervision due to irregular internal management, inadequate control of related party transactions, and illegal prudent operating principles.
Deposit growth was weak
Since the establishment of WeBank, the first private bank in China initiated by Tencent and other enterprises in December 2014, private banks have a history of nearly 7 years. Up to now, a total of 19 private banks in China have been approved to open. The surging news flipped through the official websites of 19 private banks and found that only Jilin Yilian Bank and Beijing Zhongguancun Bank disclosed the third quarter report of 2021 on their official websites.
It is worth mentioning that the three quarterly reports of these two private banks show that the growth of the deposit business in the third quarter of this year is weak, and even lower than that of the second quarter.
According to yilian bank's third quarterly report in 2021, as of the end of September 2021, the total assets of Yilian Bank were 58.1 billion yuan. From January to September this year, the operating income of Yilian Bank was 1.244 billion yuan, an increase of 33.76% year-on-year; the net profit was 121 million yuan, down 52.73% year-on-year. In terms of deposits, as of the end of September this year, the balance of personal deposits of Yilian Bank was 25.204 billion yuan, while as of the end of June this year, the balance of personal deposits of Yilian Bank was 25.277 billion yuan, a slight decrease from the previous month.
According to Zhongguancun Bank's 2021 third quarter report, as of the end of September 2021, The total assets of Zhongguancun Bank were 44.751 billion yuan. From January to September this year, Zhongguancun Bank achieved operating income of 921 million yuan, an increase of 77.35% year-on-year, and net profit of 259 million yuan, an increase of 127.83% year-on-year. In terms of deposit absorption, as of the end of September this year, Zhongguancun Bank had absorbed deposits of 27.852 billion yuan, while as of the end of June this year, Zhongguancun Bank had absorbed deposits of 29.132 billion yuan, down 4.39% from the previous month.
According to the rating report of Oriental Jincheng on Huatong Bank, as of the end of June this year, the total assets of Huatong Bank were 16.797 billion yuan, down 25.68% from the end of 2020; the balance of deposits fell from 14.441 billion yuan at the end of 2020 to 9.935 billion yuan, a decrease of 31.20%,20%,00% and the loan balance fell from 12.502 billion yuan at the end of 2020 to 10.359 billion yuan, a decrease of 17.14%.
How to view the pressure on the deposit business of private banks at this stage?
Zhou Maohua, a macro researcher at the financial market department of Everbright Bank, said in an interview with the surging news that in recent years, China has accelerated the completion of the shortcomings of the regulatory system, strengthened supervision, maintained the normal competition order of the deposit market, protected the legitimate rights and interests of consumers, standardized cooperation between banks and third-party platforms, and managed problems such as high-interest deposits. Some private banks that rely heavily on third-party platforms to obtain customers and absorb deposits inevitably face certain pressures in the short term. At present, the net interest margin of domestic banks still accounts for a large proportion of profits, which means that the decline in liabilities of some private banks is bound to form a constraint on the expansion of short-term assets.
Dong Ximiao, chief researcher of CmLCC Finance and part-time researcher of the Institute of Financial Research of Fudan University, believes that the weak growth of private bank deposits is not only related to the tightening of regulatory policies, but also related to the narrow debt channels of private banks.
"Internet deposits quickly reflect the dilemma faced by small and medium-sized banks in recent years. The capital strength of small and medium-sized banks is weak and the debt is more restricted, which affects their ability to provide credit and is not conducive to their service to the real economy. Therefore, it is necessary to continue to support small and medium-sized banks to introduce qualified shareholders for capital increase and share expansion, and give priority to supporting small and medium-sized banks to list and raise funds at home and abroad. It is proposed to revise the current relevant measures to facilitate more small and medium-sized banks to enter the interbank lending market as soon as possible to carry out liquidity management and obtain low-cost funds through the issuance of financial bonds, so as to alleviate the problem of single source of liabilities. At the same time, we should further deepen the marketization of deposit interest rates, implement differentiated policies, and allow small and medium-sized banks to adopt a more flexible floating space for deposit interest rates under the self-discipline mechanism of market interest rate pricing. Dong Ximiao said.
It is expected that the expansion of private banking business will be blocked this year, and the scale of channel deposit and loan products will shrink significantly
In order to promote the steady and healthy development of the Internet loan business, the China Banking and Insurance Regulatory Commission issued the Interim Measures for the Administration of Internet Loans of Commercial Banks in July 2020, which formulated a number of regulations on the management of loan cooperation, which pointed out the direction for further regulating the "loan assistance" business.
On February 20 this year, the China Banking and Insurance Regulatory Commission (CBIRC) issued the Notice on Further Regulating the Internet Loan Business of Commercial Banks, which sets three restrictive quantitative indicators for the Internet loan business of commercial banks, and clarifies that local corporate banks are not allowed to carry out Internet loan business across the jurisdiction of the place of registration. The three quantitative indicators are: the proportion of capital contribution, that is, the proportion of loans jointly funded by commercial banks and cooperative institutions, and the proportion of capital contributed by partners in a single loan shall not be less than 30%; the concentration index, that is, the balance of loans issued by commercial banks and single partners of the Bank shall not exceed 25% of the net capital of Tier 1; and the limit indicator, that is, the balance of Internet loans jointly funded by commercial banks and all cooperative institutions, shall not exceed 50% of the total loan balance.
At the same time, this year, the General Office of the Central Bank of China issued the "Notice on Regulating the Relevant Matters Concerning Commercial Banks' Individual Deposit Business Through the Internet", which requires that the Internet deposit business of commercial banks should strictly implement the rules for the settlement of deposits and the relevant provisions of the self-discipline mechanism for market interest rate pricing, and must not carry out time deposits and fixed-income two-penny deposit business through non-self-operated network platforms.
The rating report of Oriental Jincheng pointed out that it is expected that the business expansion of private banks will be blocked in 2021, and the growth rate may even be negative, the scale of channel deposit and loan products will shrink significantly, and private banks will continue to be under pressure in terms of business expansion and future profits.
Frequently receive fines
In addition to the pressure on business and profitability of private banks, the surging news also observed that since the beginning of this year, Wenzhou Minshang Bank, Sichuan Xinnet Bank, Shanghai Huarui Bank, Chongqing Fumin Bank and other private banks have been fined by the regulator.
Specifically, the Civil and Commercial Bank was fined 2.25 million yuan for six violations of laws and regulations, such as issuing fixed asset loans to real estate projects with insufficient capital; credit funds flowing directly or in disguise into the real estate market; and inaccurate five-level classification of loans, and five relevant responsible persons were warned, and one of the relevant responsible persons was also fined 100,000 yuan.
Xinnet Bank was fined RMB6.3 million for failing to perform customer identification obligations in accordance with regulations, failing to keep customer identity information and transaction records in accordance with regulations, failing to submit large transaction reports or suspicious transaction reports in accordance with regulations, and conducting transactions with unidentified customers.
Huarui Bank was fined more than RMB5.2 million for 11 violations of laws and regulations, including major related party transactions without the approval of the board of directors, illegally granting loans to real estate projects with insufficient capital, and allowing borrowers to use working capital loans for equity investment.
Fumin Bank was fined RMB8.5 million for failing to perform its duties in the Internet loan management process at the first level of the two sessions; unfair pricing of related party transactions, conveying benefits to related parties; lack of control over third-party cooperative institutions; and inadequate protection of consumer rights and interests. Among them, the relevant responsible persons were also punished: Zhang Guoxiang was fined 500,000 yuan, Chu Longchun was fined 300,000 yuan, Zhong Ziming was fined 200,000 yuan, and Li Bingyang was warned.
Zhou Maohua believes that from the disclosure of information, the reasons for the punishment of these private banks mainly involve irregular internal management, inadequate control of related party transactions, and illegal prudent operation principles. It reflects that the internal governance of some private banks is not perfect enough, there are problems with violations in business development, the awareness of legal compliance operation is insufficient, and the comprehensive quality of some private bank salesmen needs to be improved.
Dong Ximiao added that under the normalization trend of strong supervision and strict supervision, there are quite a few large fines in the banking industry, and the fines of private banks are relatively small.
Editor-in-Charge: Zheng Jingxin
Proofreader: Shi Gong
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