2024 is a bit of a special year for internet banks. Since its establishment in 2014, the Internet banking industry has gone through ten years.
Looking back at the development of Internet banks in the past decade, it does reflect stronger growth than traditional banks. The digital operation model with the support of financial technology allows Internet banks to acquire customers and operate at a lower cost.
The ability to obtain scenario data and the ability to analyze and apply it in the future have become the core competitiveness of Internet banks, and have finally created the pattern of today's Internet banking track ten years later.
From the perspective of target customer positioning, WeBank, MYbank, Sushang Bank (formerly Suning Bank), Xinwang Bank, and Yealink Bank are the most comparable, and the target customer groups are all small and micro users.
As of press time, Sushang Bank's annual report has not yet been released, so let's compare the operating data disclosed by WeBank, MYbank, Xinwang Bank, and Yealink Bank in 2023 to explore the current development status of Internet banks.
01
WeBank, MYbank
One super and one strong
As of the end of 2023, WeBank's total assets were 535.579 billion yuan, an increase of 13.02% from the end of the previous year, MYbank's total assets reached 452.13 billion yuan, an increase of 2.5% from the beginning of the year, Xinwang Bank's total assets were 102.934 billion yuan, and Yealink Bank's total assets were 51.775 billion yuan.
The total assets reflect the volume of each Internet bank, and also directly reflect the current development pattern of Internet banks. Xinwang Bank, Yealink Bank and WeBank, and MYbank have opened a huge gap, and the gap between MYbank and WeBank does not seem to be that big. But if we look at the other core indicators, the gap between the two is obvious.
As of the end of 2023, WeBank's loan balance was 414.5 billion yuan, an increase of 23% from the end of the previous year, MYbank's loan balance was 270.582 billion yuan, an increase of 18.58% from the beginning of the year, Xinwang Bank's loan balance was 75.337 billion yuan, and Yealink's loan balance was 33.602 billion yuan.
MYbank's loan balance is more than 100 billion yuan less than that of WeBank.
Looking at revenue and net profit, in 2023, WeBank will achieve revenue of 39.361 billion yuan and net profit of 10.815 billion yuan, MYbank will achieve operating income of 18.743 billion yuan, a year-on-year increase of 19.49%, and net profit will be 4.203 billion yuan, a year-on-year increase of 18.8%. Although the growth rate is also good, whether it is revenue or net profit, WeBank is more than twice that of MYbank.
In terms of asset quality, internet banks performed well overall.
At the end of 2023, WeBank's NPL ratio was 1.46%, MYbank's NPL ratio was 2.28%, Xinwang's NPL ratio was 1.71%, and Yealink's NPL ratio was 1.61%.
MYbank explained that in the non-performing loan ratio data, credit non-performing loans are calculated according to the expected 30-day caliber, and if calculated according to 60 days, the non-performing loan ratio is 1.87%.
The asset quality of Internet banks is stable, and if we take into account the characteristics of Internet banks' customer base, the asset quality performance is excellent.
On the whole, the Internet banking track has formed a pattern in which WeBank is the first to surpass and MYbank is the strongest, and the two are far ahead of other Internet banks.
This pattern may have been doomed from the beginning of the establishment of various Internet banks.
Internet banks obtain data through active traffic platforms, and then use model algorithms to acquire customers, risk control, credit grants, and lend online. Therefore, the acquisition and subsequent utilization of scenario data constitute the core barriers of Internet banks in all aspects. This is why the vast majority of shareholders of Internet banks have Internet giants.
WeBank is backed by Tencent, MYbank is backed by Alibaba, Yealink Bank is backed by Meituan's Jilin Sankuai Technology, and Xinwang Bank is backed by Xiaomi Group.
According to the latest disclosed data, as of the end of 2023, WeBank's number of individual effective customers has reached 399 million, an increase of 3,700 from the end of the previous year. As of the end of 2023, MYbank has served more than 53 million customers. Xinwang Bank and Yealink Bank did not disclose the overall number of customers. The gap between MYbank and WeBank is still the same, and other Internet banks are even bigger.
It can be said that the resource endowment of shareholders is the most fundamental reason for the gap between Internet banks.
02
Hold on to consumer loans
Make efforts to develop personal business loans
From the perspective of customer positioning, Internet banks mainly focus on the long-tail customers of the B-end and C-end. The extent to which the fist products can reach these long-tail customers determines the upper limit of the development of Internet banks.
From this point of view, WeBank's "Micro Loan" is undoubtedly the most typical and successful Internet banking loan product.
WeBank's core product, WeLoan, has served more than 63 million customers by the end of 2023. Covering 31 provinces, more than 81% of customers are non-white-collar employees, 85% of customers have college degree or below, and about 17% of customers have previously been "first household loans" with no bank credit records. In 2023, more than 950,000 loans will be issued per day, with an average loan of 7,400 yuan. In 2023, more than 80 million loans will have a duration of less than 10 days, and about 70% of them will have a single borrowing cost of less than 100 yuan.
Similarly, for micro-business loans for public products, 100% of the customers are private enterprises, with more than 70% of customers with revenue of less than 10 million yuan, with an average credit of about 1.1 million yuan, an average loan of about 250,000 yuan, and about 50% of the interest on a single loan within 1,000 yuan.
In addition to conventional loan products, Internet banks also have other scenario-based products, which are also important for Internet banks, which account for the majority of consumer finance business, and are also a major reason for widening the gap.
A typical scenario product of Internet banking is WeBank's "micro car loan". WeBank's micro-car loan business has established cooperation with more than 20 new energy vehicle brands, and will serve more than 90,000 customers in 2023.
However, in recent years, for Internet banks, only digging into the potential of personal consumption loans can no longer meet the growing demand.
In 2023, WeBank expanded the coverage of loans to small and micro enterprises, increased the support for resource allocation, and the balance of inclusive small and micro enterprise loans increased by 29% compared with the end of the previous year. Excavate the stock of micro loans to small and medium-sized business customers, and provide micro loans to individual business loans. As of the end of 2023, Micro Household Loan has served more than 3.32 million small and micro natural person customers.
In 2023, MYbank issued RMB1.46 trillion in new loans and served 12.86 million customers. Among them, the balance of inclusive small and micro loans on the balance sheet at the end of 2023 was 193.253 billion yuan, an increase of 21% from the beginning of the year. MYbank's inclusive small and micro loans increased by 13% and 53% respectively from the beginning of the year. Among the new loan customers in 2023, first-time borrowers accounted for 74.54%.
Xinwang Bank further strengthened its self-operation capacity, increased the expansion of loan channels for merchants and enterprises, increased the "borrow and repay" credit loans for small and micro enterprises and individual industrial and commercial households, and covered the borrow-and-repay model to other inclusive credit products. In 2023, the new amount of small and micro loans issued by Xinwang Bank will be 48.349 billion yuan, a year-on-year increase of 162.19%, and the number of new loans issued will be 287,600, an increase of 113.36% year-on-year.
In terms of small and micro finance, Yealink Bank has launched a variety of small and micro financial products such as "100 million agricultural loans", "business loans", "100 million micro loans" and "100 million enterprise loans". In 2023, Yealink Bank will have a balance of 12.043 billion yuan of inclusive small and micro loans, with a balance of 146,700 households, and a cumulative loan amount of 17.233 billion yuan and 206,000 households in the current year. The weighted average interest rate of inclusive small and micro loans was 10.79%, down 0.63 percentage points from the beginning of the year.
Yealink Bank also actively carries out joint loan business and carries out asset diversification cooperation with small and medium-sized financial institutions. In terms of self-operation, it has launched the self-operated brand of "Yilian Easy Loan", and is ready to use "Yilian Easy Loan" to maintain asset scale and income, and use "Yilian Easy Loan" to cultivate self-management capabilities.
However, Yealink Bank should further optimize the platform business structure and reduce the concentration of a single channel. This is a pressure on Yealink Bank's consumer finance business. As of the end of 2023, Yealink Bank's consumer loan balance reached 19.558 billion yuan, and the number of new customers in 2023 exceeded 3.7 million.
For Internet banks, it has become a common choice to hold the position of consumer finance, and then open up a second growth curve in personal business loans and small and micro enterprise loans.
However, we should realize that the challenge of Internet banking is not only in its own capacity building. Now, internet banks need to face the further sinking of big banks.
Internet banks acquire customers online, which already overlaps with online portals such as traditional banks, and the interest rate spread has narrowed, the sinking of large banks has intensified, and the market competition will become more intense.
In the next decade, how to consolidate the advantages of differentiated competition will become the biggest challenge for Internet banks.