The two departments have strengthened the monitoring and handling of illegal financial advertising information, group loans are booming, and Suyin KGI Consumer Finance has been approved to increase its capital to 4.2 billion yuan丨21 Consumer Finance Reference

21st Century Asset Management Research Institute Wu Shuang, Xi Chen Guici Comprehensive arrangement

【Regulatory & Industry Policies】

1. The introduction of the "Tianjin 11 Articles": focusing on five aspects, promoting financial support for recovery and expansion of consumption

On December 11, the reporter learned from the Tianjin Supervision Bureau of the State Administration of Financial Supervision and Administration (hereinafter referred to as the "Tianjin Bureau") that the Tianjin Bureau recently issued the "Notice on Further Promoting the Financial Support of Tianjin's Banking and Insurance Industry to Restore and Expand Consumption" (hereinafter referred to as "Tianjin 11"), proposing 11 special support policies in 5 aspects. It pointed out that it is necessary to strictly guard against the credit risk of consumer loans and ensure that the risk is "guaranteed". For key links such as the use of consumer loan funds, use big data technology to carry out key monitoring, and take effective measures to strictly prevent misappropriation and arbitrage. Banking institutions with relatively complete and effective risk control systems are encouraged to explore embedding borrowers' credit use behavior into consumption scenarios based on real and reliable consumption scenarios, so as to realize "credit is consumption" and control the authenticity of loan purposes to the greatest extent. (21st Century Business Herald)

2. The increase in loans in the first 11 months exceeded that of last year

According to data released by the central bank a few days ago, RMB loans increased by 21.58 trillion yuan in the first 11 months, an increase of 0.27 trillion yuan compared with last year. Taking into account the credit in December, the scale of new loans for the whole year is expected to reach about 22.7 trillion yuan, a record high. Market institutions expect credit to continue to grow next year. (21st Century Business Herald)

3. The two departments are to strengthen the monitoring and handling of illegal financial advertising information

On December 11, the Bureau of Combating Illegal Financial Activities of the State Administration of Financial Supervision and the Department of Advertising Supervision and Administration of the State Administration for Market Regulation held a signing ceremony for the Framework Agreement on Strengthening the Monitoring and Disposal of Illegal Financial Advertising Information. The two sides will strengthen cooperation in monitoring and early warning, joint research and judgment, administrative guidance, anti-Africa publicity, and mechanism building, promote the prevention of illegal activities and advertising supervision in the same direction, and work together to block the channels for the dissemination of information on illegal financial activities, so as to effectively protect the people's "money bags". (State Administration of Financial Regulation)

【Institutional News】

1. BCG predicts that the growth rate of the consumer gold market will be about 7% in the next five years, and the total scale will reach 25 trillion yuan by 2027

On December 13, The Boston Consulting Group (BCG) released the report "Integrity and Innovation, Steady and Long-term Success: The Way to Win in Consumer Finance" (hereinafter referred to as the "Report"). The report predicts that consumer finance will remain on the upward path after the epidemic, but the era of high growth has come to an end, and the market growth rate is expected to be around 7% in the next five years. By 2027, the total scale of China's consumer finance will reach 25 trillion yuan. Among them, consumer loans of banks and consumer finance companies will continue to maintain double-digit growth, and the proportion of consumer finance will also exceed that of credit cards. (21st Century Business Herald)

2. Group loans are hot

As the New Year approaches, bank consumer loan marketing is becoming more and more "involuted", and discounts and interest rate cuts are frequent. On December 14, a reporter from Beijing Business Daily noticed that group loans were back in the world, and many banks released tweets about group loans, providing preferential interest rates for specific groups of people, as long as they find a "loan partner" of the same unit to apply for a loan together, they can get a lower loan interest rate. For example, some banks have marked in the "group loan" that if an individual applies for a loan, the annual interest rate is 5.5%, and if a group is formed, the annual interest rate is 4.5%, and some banks have played the slogan of "the interest rate is lower" and "the interest rate is more and more saving" to attract the attention of financial consumers. In terms of group size, small groups of 3-5 people are more common, but there are also large groups of about 15-30 people. (Beijing Business Daily)

3. Suyin KGI Consumer Gold was approved to increase its capital to 4.2 billion yuan

On December 14, the official website of the State Administration of Financial Supervision and Administration announced the approval of Suyin KGI Consumer Finance Co., Ltd. (hereinafter referred to as "Suyin KGI Consumer Finance") to increase its registered capital and adjust its shareholding structure. The registered capital of Suyin KGI was changed from RMB 2.6 billion to RMB 4.2 billion.

Suyin KGI was established in April 2017 and was approved to open on March 2, 2021. According to the 2023 semi-annual report of Bank of Jiangsu, as of the end of June this year, the balance of Suyin KGI consumer loans was 30.259 billion yuan, and the cumulative number of customers served exceeded 5 million.

4. The Financial Digital Development Alliance and UnionPay Data jointly released the "2023 Consumer Finance Digital Transformation Theme Research Report"

Recently, the Financial Digital Development Alliance and UnionPay Data jointly released the "2023 Consumer Finance Digital Transformation Theme Survey Report" (hereinafter referred to as the "Report"), which counts the market share of consumer finance of different types of institutions. According to the report, the balance of credit card loans in mainland China has increased year by year in recent years, and the scale has grown steadily, but the growth rate has slowed down slightly. As of the first half of 2023, the outstanding balance of bank cards reached 8.55 trillion yuan, accounting for about 46% of the total scale of the consumer finance industry, and the industry share was the largest. This is followed by self-operated consumer loans by banks (including private banks), accounting for 25%. In the first half of 2023, the scale of personal consumption loan business of many banks has increased significantly, among the banks that separately disclose the balance data of personal consumption loans, the business scale of the Postal Savings Bank is the largest, the bank's consumer loan balance in the first half of 2023 reached 469.7 billion yuan, and among the regional banks, the balance of personal consumption loans of Bank of Jiangsu increased from 274.3 billion yuan at the beginning of 2023 to 290.2 billion yuan in the middle of the year, ranking first. The current market share of Internet financial platforms is about 16%. Based on this calculation, the entire Internet loan balance is about 3 trillion yuan. The remaining institutions account for a relatively small proportion of licensed consumer finance companies and auto finance companies, with market shares of about 5% and 4% respectively. Other institutions include offline microfinance companies, etc.

5. Changan Automobile Finance Co., Ltd. launched motorcycle finance business This year, it has issued ABS with a scale of 6.5 billion yuan

Recently, Changan Automobile Finance Co., Ltd. (hereinafter referred to as "Changan Automobile Finance") officially launched the cooperation between Jinan Qingqi Suzuki Motorcycle Co., Ltd. (hereinafter referred to as "Qingqi Suzuki"). Changan Automobile Finance and Qingqi Suzuki are brother enterprises and members of China Ordnance Equipment Group.

Founded in 2012 with a registered capital of 500 million yuan, Changan Auto Finance's main business is to provide auto financial services for auto dealers, institutions and individual consumers. Founded in 1994 and officially put into operation in July 1996 with a registered capital of 24 million US dollars, the company is positioned as a professional manufacturer of medium and high-end motorcycles. As a leading auto finance company, Changan Auto Finance played a stable role last year. As of the end of 2022, Changan Automobile's total financial assets had reached RMB74.483 billion, up 13.05% year-on-year, and net loans and advances amounted to RMB63.911 billion, up 10.45% year-on-year. According to the official website of CNABS, since 2018, Changan Auto Finance has issued a total of 10 ABS with an issuance scale of 28.488 billion yuan, and in 2023, Changan Auto Finance will issue three ABS financing with a term of 6 years, with a total principal of 6.5 billion yuan.

6. WeChat is launched in stages

Tencent focuses on consumer finance, and WeChat is launched in installments. In September this year, according to Laser Finance, Tencent was testing this product on a small scale in grayscale, but it was not officially launched at that time. At present, a larger number of users have received reminders to activate WeChat installment. According to the user's qualifications, the amount of installment ranges from thousands of yuan to tens of thousands of yuan. Hejin Finance experience found that when users use WeChat Pay, WeChat installments support installment payments of more than 500 yuan, which can be divided into 1, 3, 6, and 12 installments, with different handling fees.

7. Chongqing Zhongjin Tongsheng Small Loan issued 524 million yuan ABS project, with a loan balance of 1.084 billion yuan

Recently, the "Tianfeng-CICC Tongsheng Small and Micro Business Loan Asset-Backed Special Plan" initiated by Chongqing Zhongjin Tongsheng Microfinance Co., Ltd. (hereinafter referred to as "CICC Tongsheng Microfinance") was successfully issued on the Shanghai Stock Exchange, with a total scale of 524 million yuan, of which the priority scale is 420 million yuan, AAA rating, and the coupon rate is 3.88%. According to the data, this ABS project is the only securitization product successfully issued by a state-owned microfinance company without external credit enhancement and with a low coupon rate in the past three years, and it took only 25 working days from acceptance to approval.

8. The original operating entities of Huabei and Baobei have removed the loan business

Recently, Chongqing Ant Small and Micro Loan Co., Ltd., the original operating company of Ant Huabei, was renamed Chongqing Ant Small and Micro Information Technology Co., Ltd., and its business scope was removed from "handling various loans, bill discounts, and asset transfer businesses nationwide", and advertising production, Internet sales, hotel management, etc. were added.

According to reports, "Huabei" and "Borrow" were originally the main businesses of Chongqing Ant Small and Microfinance Co., Ltd. and Chongqing Ant Shangcheng Microfinance Co., Ltd., which are subsidiaries of Ant Group. In July this year, Chongqing Ant Shangcheng Microfinance Co., Ltd. has changed its name to Chongqing Ant Shangcheng Information Technology Co., Ltd., and its business scope has been removed from "handling various loans, bill discounting, and asset transfer business nationwide".

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