The partner’s capital contribution ratio in a single loan shall not be less than 30%; the balance of the bank’s loan issued with a single partner shall not exceed 25% of the net tier 1 capital; the balance of Internet loans issued jointly with all partner institutions shall not exceed the total loan 50% of the balance...
After the "Interim Measures for the Administration of Internet Loans by Commercial Banks" was promulgated in July last year, the supervision of online loan business has been strengthened.
The General Office of the China Banking and Insurance Regulatory Commission recently issued the "Notice on Further Regulating the Internet Loan Business of Commercial Banks" (hereinafter referred to as the "Notice"), which sets three restrictive quantitative indicators for the Internet loan business of commercial banks. The jurisdiction develops Internet loan business.
Analysts pointed out that the "Notice" is not good for Internet giants. The core is still to reduce leverage and regulate joint lending. Local small and medium-sized banks are under pressure, which once again benefits the top banks.
By Lin Xiaoli, All Media Reporter, Guangzhou Daily
The partner's capital contribution ratio in a single loan shall not be less than 30%
Internet loans such as loan assistance and joint loans are new loan methods that have emerged in the banking industry in recent years. While bank online loans are developing rapidly, there are also some hidden dangers.
As early as July 2020, the China Banking and Insurance Regulatory Commission has promulgated and implemented the Interim Measures for the Administration of Internet Loans by Commercial Banks (hereinafter referred to as the Measures).
Regarding the issuance of the "Notice", the relevant person in charge of the China Banking and Insurance Regulatory Commission stated that the supervisory department, based on the opinions of multiple parties, has fully studied and demonstrated in light of the actual situation, and believes that it is necessary to further refine and prudence in accordance with Article 62 of the Measures. Regulatory requirements and unified regulatory standards.
It can be said that the "Notice" is a "patched" upgrade to the "Measures" last year.
Compared with the "Measures", the "Notice" sets a number of more specific and quantitative regulatory requirements.
The "Notice" clarifies three quantitative indicators, including the proportion of capital contribution, that is, if a commercial bank and a partner institution jointly fund an Internet loan, the partner's capital contribution ratio in a single loan shall not be less than 30%.
"In practice, individual banks have weak credit risk management, inconsistent rights and responsibilities with partners, and other issues and problems, which have damaged the foundation of the healthy and sustainable development of the Internet loan business." The relevant person in charge of the China Banking Regulatory Commission said, in order to create fairness. The market order of business development and healthy competition guides commercial banks to prudently carry out cooperation with various institutions in accordance with the principles of risk-sharing, mutual benefit and win-win. The "Notice" detailed the management requirements for the investment ratio range on the basis of the "Measures". A quantitative standard.
This standard is based on the actual situation of the current commercial banks’ Internet loan business development, after full investigation and calculation, and also takes into account the consistency with the relevant provisions of the "Interim Measures for the Management of Internet Small Loan Business (Draft for Comment)" to avoid Regulatory arbitrage.
The bank's Internet loan balance must not exceed 50% of the bank's total loan balance
The three quantitative indicators, in addition to the proportion of investment, also include concentration indicators and quota indicators.
On the one hand, commercial banks and cooperative institutions jointly fund loans, and the balance of loans issued by the bank with a single partner shall not exceed 25% of the bank's net tier 1 capital.
On the other hand, the balance of Internet loans jointly funded by commercial banks and cooperative institutions shall not exceed 50% of the bank's total loan balance.
Some insiders in the banking industry said that at present, the loan scale of most institutions should be within the limit, because 50% is actually a very high ratio.
The aforementioned relevant person in charge of the China Banking and Insurance Regulatory Commission stated that the above-mentioned regulations can not only promote commercial banks to further realize the appropriate dispersion of Internet loan business, avoid the concentration risk of excessive reliance on a single cooperative institution, and reserve space for the healthy development of Internet loan business.
In fact, the "Measures" also put forward the requirements for quota management and centralized management of cooperative institutions.
Among them, Article 53 of the Measures clearly states that commercial banks should carefully select cooperative institutions in accordance with the principle of moderate dispersion to avoid excessive reliance on cooperative institutions; Article 54 stipulates that commercial banks should include the total amount of loans issued jointly with cooperative institutions. Limit management, and strengthen the concentration risk management of co-financing loan cooperative institutions.
"However, in practice, commercial banks have different understanding and grasp of the above regulations, and the concentration management and limit management of individual institutions have failed." The aforementioned person in charge pointed out.
Ban local banks from operating across regions
In response to the market’s recent concerns about the cross-regional operation of local banks, the "Notice" further clarified and strictly controlled the cross-regional operation of Internet loans, emphasizing that local corporate banks that carry out Internet loan business should serve local customers and must not develop Internet across jurisdictions of registration loan service.
In fact, in recent years, some local banks have used Internet technology to expand their business areas, seriously deviating from their positioning, and expanding blindly and disorderly, bringing greater risks and hidden dangers.
This issue has attracted great attention from the regulatory authorities, and has strengthened the standardization and reform of cross-regional operations of local banks in all fields.
The "Commercial Bank Law (Revised Proposal)", which the People's Bank of China recently publicly solicited opinions, also clearly stipulated that regional commercial banks may not conduct business across regions.
However, it is worth noting that the "Notice" fully considers the actual situation of some institutions, and exempts the above provisions for institutions that do not have physical operation outlets and whose business is mainly carried out online and meet other requirements of the regulatory agency.
In addition, the "Notice" requires commercial banks to strengthen the responsibility of risk control entities, independently carry out Internet loan risk management, independently complete risk control links that have an important impact on loan risk assessment and risk control, and prohibit outsourcing of key links.
Impact geometry: small and medium banks are under pressure to the disadvantage of Internet giants
Some insiders in the banking industry believe that the "Notice" has a greater impact on Internet platforms, because 30% of the capital contribution greatly reduces the flexibility of joint loans or loan assistance leverage.
Soochow Securities analyst Ma Xiangyun also believes that the "Notice" is not good for Internet giants. The core is still to reduce leverage and regulate joint lending. On the one hand, all types of joint loans must meet the 30% capital contribution limit, which means Tencent WeBank, etc. The joint loan business should also be rectified with reference to Ant; on the other hand, the concentration index restricts the joint loan quota of financial institutions and a single Internet platform, which means that the share of giants is restricted.
However, the concentration control is good for the top banks, because the top banks have a strong capital scale and have more quotas to cooperate with Internet platforms, and the right to negotiate will also increase.
All media reporters of the Guangzhou Daily learned that when small and medium-sized banks cooperate with large-scale Internet platforms for joint loans, the proportion of capital contributions by the partners is only about 10% to 20%.
In addition, Ma Xiangyun pointed out that the quota index obviously limits the scale of joint loans of small and medium banks and prohibits loans from other places. It is expected that it will be difficult for local small and medium banks to rely on Internet loan business expansion.
From this perspective, medium and large banks that can do business nationwide will benefit again.
However, the "Notice" also set a transition period. Regarding the quantitative standards for concentration risk management and limit management, the regulatory authorities will follow the principle of "one line, one policy, and smooth transition" to supervise and guide institutions before July 17, 2022. The order rectification is completed.
With regard to the capital contribution ratio standard and cross-regional operation restrictions, the "new and old division" is implemented, and new businesses are required to implement the "Notice" requirements from January 1, 2022, allowing existing businesses to be settled naturally.
It is worth noting that the "Notice" clearly includes trust companies in the scope of supervision, and consumer finance companies and auto finance companies also apply the "Notice".
However, the industry believes that the new regulations have little impact on these industries.