Under the circumstance that the supervision is clearly stopped, Hunan Sanxiang Bank is still issuing credit loans nationwide with the help of digital banking technology and major shareholder group companies
Previously, the regulatory authorities issued a document prohibiting commercial banks from carrying out Internet loan business across the jurisdictions of the place of registration. Hunan Sanxiang Bank Co., Ltd. (hereinafter referred to as "Hunan Sanxiang Bank") under the personal consumption loan product "Consumer One Loan" mainly "10 minutes to apply, 1 minute to the account, 0 manual intervention", the product still supports off-site application.
In addition, the "Consumer One Loan" promotional page shows that the maximum loanable amount is 300,000 yuan, which has exceeded the regulatory "red line" of 200,000 yuan. According to the bank's customer service staff, the amount of 300,000 yuan is only for employees of Sany Group Co., Ltd. (hereinafter referred to as "Sany Group"). According to the data, Sany Group is the largest shareholder of Hunan Sanxiang Bank, Sany Group provides a large number of employee lists and related data of the enterprise, hunan Sanxiang Bank reviews the data, and adds a "white list" for the employees of Sany Group, and the employees who pass the audit can apply for loans through internal channels at any time. In addition, Sany Group and its related parties have frequent related party transactions with banks.
Illegal off-site lending
On 20 February 2021, the China Banking and Insurance Regulatory Commission (CBIRC) issued the Notice on Further Regulating the Internet Loan Business of Commercial Banks (hereinafter referred to as the "Notice"), which imposes regulatory requirements on commercial banks carrying out Internet loans, which stipulates that local legal person banks carrying out Internet loan business shall serve local customers and shall not carry out Internet loan business across the jurisdictions of the place of registration. The Circular requires new transactions to implement the above provisions from 1 January 2022, however, some banks are still issuing loans nationwide.
A loan product with the slogan of "10 minutes to apply, 1 minute to account, 0 manual intervention" attracted the attention of reporters, and the product was "Consumption One Loan", a personal consumption loan product of Hunan Sanxiang Bank. According to the bank's official website, the loan term of "Consumer One Loan" is divided into 3, 6 and 12 periods, without collateral, nor third-party guarantee, and can be recycled for one approval, and the amount period is 1 year.
* Hunan Sanxiang Bank loan product, screenshot from the bank APP
The application method of "Consumer One Loan" is online application for mobile banking APP. After completing the process of real-name authentication, face recognition, improving personal information, filling in account opening information, etc., the user successfully opened an account online. It is worth noting that the reporter is not from Hunan and is not in Hunan, but after successfully opening an account and binding an account, he can apply for a "consumption loan".
The reporter called the customer service telephone of Hunan Sanxiang Bank to inquire about the processing process of "Consumer One Loan", and the other party replied, "The loan is a full-line self-service application, the comprehensive annualized interest rate is as low as 7.6%, and the actual interest rate and approval time are subject to the user's personal situation." When asked whether foreign users can apply, the customer service staff confirmed, "Foreign (users) can also apply, directly on the APP operation."
The person in charge of the relevant department of the Banking and Insurance Regulatory Commission said in response to a reporter's question on the "Notice" that in recent years, some local banks have used Internet technology to expand their business areas, seriously deviating from their positioning, blindly and disorderly expansion, and bringing greater risks and hidden dangers. The person in charge also said that the basic positioning of the operation and development of local banks is to base themselves on the local market and serve local customers. The CBRC will urge commercial banks to formulate rectification plans for Internet loan businesses that do not meet the requirements of this Notice, and the existing business will be rectified during the transition period, and the transition period will be two years.
Sanxiang Bank was officially opened on December 26, 2016 with a registered capital of 3 billion yuan, registered in Changsha, Hunan Province, and jointly initiated by nine private enterprises as promoter shareholders, making it the first private bank in Hunan Province and central China.
Previously, private banks were subject to the restriction of "one line and one store", and the development of deposit and loan business was restricted. In 2018, the regulator issued a document to relax this restriction, and private banks that have been in business for three years and have issued a recommendation letter from the local provincial government can open branches, but the newly established branches must be within the registered jurisdiction. Nevertheless, at present, Sanxiang Bank has only one business outlet, and according to the notice, the bank can only issue loans in Hunan.
According to the annual report data, as of the end of June 2021, Hunan Sanxiang Bank served 8.8152 million customers, an increase of 1.3076 million households over the beginning of the year, and issued loans of 52.966 billion yuan to small and micro business owners, individual industrial and commercial households and general users in the first half of the year, and 24.29 billion yuan of credit loans using digital banking technology.
The loan amount of the major shareholder employee is higher than the regulatory line
In addition, the App of Hunan Sanxiang Bank shows that the maximum loanable amount of "Consumer One Loan" is 300,000 yuan, while the "Interim Measures for the Administration of Internet Loans of Commercial Banks" (hereinafter referred to as the "Measures") issued by the Banking and Insurance Regulatory Commission stipulates that the credit line of personal credit loans used by a single household for consumption should not exceed 200,000 yuan.
* "Consumption One Loan" page, screenshot from the bank APP
The above-mentioned customer service staff told reporters that "the maximum 300,000 yuan is only for employees of Sany Group, while others are only up to 200,000." According to the official website of Hunan Sanxiang Bank, the bank has carried out in-depth cooperation with Sany Group, Sany Group provides a large number of employee lists and related data of enterprises, the bank conducts unified review, completes the white list addition operation, and the bank completes the customer risk identification and loan approval work. Sany Group employees who have passed the whitelist review can apply for "Consumption One Loan" through internal channels at any time, and automatically approve and lend money online.
In view of whether the above-mentioned business behavior of the bank should follow the "Notice" and "Measures" and other relevant laws and regulations, a bank market analyst said, "The credit line given by the bank to the customer needs to be carried out in accordance with laws and regulations and in accordance with the principles of market-oriented business, even if the customer is an employee of the bank, let alone an employee of the bank's shareholder company; because no matter which employee, the credit and financial status are very different, and the bank carries out business first and complies with the law, and grasps the risk control."
According to public information, Sany Group was founded in 1989, the main business is the "engineering" theme of machinery and equipment manufacturing, there are currently dozens of holding or shareholding subsidiaries nationwide. Among them, only Sany Heavy Industry (600031. SH) has more than 20,000 employees, and the annual report data shows that as of the end of 2020, the company's number of employees was 24,600.
Wang Chikun, an independent economist and financial commentator, analyzed to the "China Science and Technology Investment" reporter that the strength of small and medium-sized banks and state-owned banks is very different, and they are far behind state-owned banks and state-owned commercial banks in terms of operating years, financial strength, operating capabilities, and relevant policies, and their business capabilities are limited.
Wang Chikun added, "At present, the banking market is in the stage of stock market, and the market-oriented operation of the banking industry is linked to salary income, and the competition of banks is very fierce, and the conventional operating means and promotional means can no longer easily complete the work performance." In order to complete the performance, some bank operators can only dig out their minds, do not take the usual road, and engage in fancy operations."
According to the annual report of Hunan Sanxiang Bank, Sany Group is the largest shareholder of the bank, holding 540 million shares, with a shareholding ratio of 18%, in addition, Hunan Sany Intelligent Control Equipment Co., Ltd. (hereinafter referred to as "Sany Intelligent") is the third largest shareholder of the bank, with a shareholding ratio of 12%. Sany Intelligent is the core enterprise of Sany Group, and as a result, Sany Group holds 30% of the shares of Hunan Sanxiang Bank through direct or indirect means.
Sany Group and its related parties also had a number of material related party transactions with Hunan Sanxiang Bank. According to the bank's 2020 annual report, in 2020, the bank had a total of 95 major transactions with related legal persons, of which 39 were credit granting business between Sany Heavy Energy Co., Ltd. and the bank, and 25 were Sany Heavy Energy Co., Ltd.
*Sany Group has a related party transaction with the bank, screenshot from the bank's annual report
In addition, at the end of last year, Sany Heavy Industry issued an announcement that the company intends to carry out deposit loans and capital-protected wealth management products in the related party Hunan Sanxiang Bank, and the balance of single-day deposits, loans and capital-protected wealth management products is capped at no more than RMB 10 billion, and the two sides are based on market price pricing.
Bai Wenxi, chief economist of IPG China, told China Science and Technology Investment that "the major shareholder company holds 30% of the shares, which is a relatively high shareholding ratio, and if the necessary constraints and checks and balances are lacking in the internal governance of the bank, it will have a certain impact on the bank's decision-making, management and business."
In response to the loan scale and loan products involving violations of Sanxiang Bank in Hunan Sanxiang Bank, the reporter wrote to the bank, but as of press time, there was no reply.
Source: Zhongke Finance