The prefix has been reduced from 3% to 2%. At the beginning of 2024, bank consumer loans will be extremely popular. "Which bank has the lowest interest rates?" "Which bank has the highest quota and fast lending?"... Under the "involution", financial consumers have room for "bargaining" and shop around to make careful choices. Banks have also lowered interest rates by launching new products, issuing coupons, group shopping, etc., in order to win a place in the "price war".
Five years ago, consumer loans were not the main direction of banks' efforts. Housing loans and commercial loans have always been the main areas. In recent years, consumer loans have gradually emerged and frequently exited the industry. To expand domestic demand and promote consumption, in 2024, with the support of solid fundamentals, consumer loans will also enter a new round of development cycle. However, there are hidden worries under the heat. Credit funds have been illegally misappropriated to support loans and purchase real estate. This has also tested the risk control capabilities of banks. Some banks are also worried that under heavy volume, it is difficult to balance benefits and costs.
"Internal Roll" Shopping
In 2024, the "involution" of the retail end of major banks will become the new normal.
Wangwang (pseudonym) works in a joint-stock bank. He has been a loan manager at this bank for nearly eight years. Unlike large state-owned banks, joint-stock banks tend to grant more consumer loans, so the interest rates are usually higher than Wangwang, a major state-owned bank, clearly remembers that three years ago, the lowest level of consumer loan interest rates within the bank was still around 5.6%. In more than three years, this level has been as low as 3%.
Not long ago, the bank launched a consumer loan welfare activity to welcome the Spring Festival in the Year of the Dragon. The annualized interest rate for eligible borrowers can reach as low as 3%. Wangwang immediately promoted this "good news" to potential customers. "This year, the 'good start' target given to me by the industry is 10 million yuan. I must work harder to complete the task." Wangwang said.
Judging from the "good start" marketing market for consumer loans in 2024, banks are eager to seek loans. Under the "price war", consumer loan interest rates are being explored again and again. The consumer loan interest rates of many banks have generally dropped to 3 Around %, some banks’ consumer loan interest rates have dropped to at least 2%.
Quotas and loan methods have also reached new highs. Different from the common "maximum amount of 300,000 yuan", many banks are actively marketing high-value consumer loan products of 1 million yuan to existing mortgage customers, new citizens, senior talents, etc. With the support of collateral, the loan amount can even be as high as 5 million yuan, and the maximum loan period of some products reaches 10 years.
The importance of consumer loans in stimulating consumption and boosting investment is self-evident. In order to improve performance and attract high-quality customers, some banks have also launched group booking services. If they are employees of the same institution and there are a large number of people participating in the group, they can enjoy the lowest interest rate.
Interest rates are getting lower and lower, and the trend is getting stronger and stronger, attracting a large number of borrowers who want to apply, and Yangyang (pseudonym) is one of them.
"Hello, you have met our bank's consumer loan user qualification requirements and can apply for a loan." "Our bank's consumer loan discounts are unprecedented, and the interest rate can be as low as 3%." In recent times, we have received one after another from The marketing text messages from different banks made him excited.
"Last year, the interest rates on consumer loans were very low. In order to ease the pressure on consumption, I borrowed a product. The interest rate at that time was 3.4%. Now some banks have lowered it to 3%, which is even lower." During the interview, Yangyang told a Beijing Business Daily reporter, “With such a low interest rate, it’s a good time to apply for a consumer loan. I plan to contact the account manager again to see if there are any more cost-effective coupons.”
Kang Kai (pseudonym), who is far away in Zhejiang, also recently received coupons from the bank. Since he is not a high-quality customer of the bank, when calculating the consumer loan limit in 2023, the consumer loan interest rate approved by the bank for Kang Kai is about 6.8%. The approval limit is only 50,000 yuan. "In the second half of 2023, my salary and provident fund have increased. In addition, I actively repay credit cards. Now after adding coupons, the maximum consumer loan limit approved by the bank is 200,000 yuan, and the interest rate is 3.68%. Although it is not the lowest, I have already Very satisfied..."
Ultra-low annual interest rates and the advantage of being unsecured have made consumer loans one of the best loan products at this stage. Thanks to the efforts, the "good start" has achieved remarkable results. A person from the Beijing Branch of a joint-stock bank revealed that as of January 24, the daily average of consumer loans increased by 3.8% compared with 2023 (annual daily average); some people from city commercial banks in Central China bluntly said that consumer loans The "good start" marketing results of the loan are very good.
Moving the timeline forward, in 2023, as banks increase their efforts in consumer credit, short-term loans represented by consumption will grow significantly. The 2023 financial statistics report released by the People's Bank of China shows that in 2023, household short-term loans Loans increased by 1.78 trillion yuan, compared with 1.08 trillion yuan in 2022.
under low interest rates
Pushing the time back to five years ago, consumer loans were not the focus of banks' development. It can be said that banks did not attach that much importance to this business. Mortgage loans were the main high-quality assets of each bank. At that time, many borrowers still believed that mortgage loans were the cheapest and longest-term funds that ordinary people could borrow in their lives, and early repayment was not considered. But in 2022, this trend suddenly changed, and some young people took the lead in joining the craze of early repayment of loans.
The "loan repayment wave" caught banks off guard. The loss of high-quality, long-term, high-interest-rate assets is not a good thing. After reviewing the situation, consumer loans have also become the next high-quality asset to leverage business growth.
The person in charge of the personal loan department of a city commercial bank bluntly said in an interview with a reporter from Beijing Business Daily that in recent years, the changes in the consumer loan business can be said to be huge. On the one hand, the business scale has continued to expand, and the number of financial institutions involved in the consumer loan market has gradually increased. On the other hand, the loan scenarios of consumer loans are constantly enriched and have penetrated into all aspects of residents’ consumer financial needs.
"Profit sharing is the foundation of consumer loans. Because it accounts for a relatively small proportion of bank loans, banks can afford it." A banker who is familiar with the consumer loan business introduced the "drift technique" in bank subsidies to a Beijing Business Daily reporter. "Consumer loans are relatively low among bank loans, with housing loans and commercial loans accounting for the largest proportion. In order to achieve profit sharing, banks will use part of the profits from commercial loans to subsidize consumer loans to achieve the purpose of reducing interest rates."
Jing Chun, general manager of the Retail Credit Business Department of Guangfa Bank Beijing Branch, also said that currently, the interest rates of various banks have dropped from about 4.6% in 2022 to about 3.6% currently, and the consumer loan products of various banks have generally improved in quality. Changes include some subdividing consumption directions and consumption scenarios, and some subdividing consumer groups. For banks, the financial industry not only has profit goals, but also adheres to the political and people-oriented nature of finance. Boosting the consumer market is also one of the responsibilities and obligations of the banking industry.
Large and medium-sized banks have their own scale effect and strong strength, so they naturally do not worry about cost issues. But for local banks, are consumer loans really easy to do? This has to mention the main factors that affect bank loan costs: early marketing, loan interest rates, loan terms, and later business maintenance costs. Preliminary marketing expenses, such as producing electronic posters online, promoting consumer loan business, and holding "good start" lottery activities offline to attract borrowers. In terms of loan interest rates, the higher the interest rate, the more income the bank earns and the smaller the impact on costs; conversely, when the interest rate gets lower and lower, the less income the bank earns, and the funds to cover costs also decrease. Looking at the loan period, the cost of long-term loans is higher than the cost of short-term loans, and late factors such as borrower overdue and lawsuits have invisibly pushed up the bank's costs.
A person from the personal loan department of a rural commercial bank located in the western region said frankly, “We want to lend money to the consumer loan business now, but we dare not lend too much. On the one hand, under the background of promoting consumption, it has become a routine action to promote consumer loans; But on the other hand, we also need to control cost issues.”
"Although the bank is still profitable, we have already felt pressure invisibly." This person from the personal loan department of the Rural Commercial Bank said, "If the consumer loan interest rate drops even lower in the future, we cannot rule out the possibility that the cost will not be covered. situation, a new balance needs to be found.”
Controlling operating costs and balancing revenue must be done simultaneously. Some bankers believe that lower consumer loan interest rates may indeed affect banks' profitability. However, banks are also facing greater competitive pressure in acquiring customers, and they need to lower interest rates to attract customers. In this case, banks can reduce costs and improve profitability by optimizing their liability structure and improving operational efficiency. At the same time, banks should also pay attention to the comprehensive contribution of customers, not only focusing on loan interest rates, but also considering other aspects of income.
Concerns about rapid expansion
According to the formal application process, the purpose of consumer loans mainly covers home decoration and building materials, tourism consumption, comprehensive consumption, education and study abroad, health care, large-scale consumer goods, etc. However, during the investigation process, a reporter from Beijing Business Daily noticed that some loan intermediaries It takes advantage of the characteristics of consumer loans such as low interest rates and no collateral to encourage consumers to withdraw money to repay their mortgages or restructure their debts.
However, as the consumer loan market gradually becomes "white-hot", some banks have also begun to "take the wrong approach." "The bank's latest consumer loan product, with a maximum limit of 1 million yuan, does not look at credit reports or liabilities!" Some loan intermediaries shouted on social media that the bank has launched a "good start" consumer loan product. In the marketing of loan intermediaries, consumer loans It seems to be a "universal loan" that can lower monthly payments, increase credit limits, extend loan terms, and restructure debt.
Loan intermediary Li Fei (pseudonym) told a Beijing Business Daily reporter, "Our 'good start' is basically carried out simultaneously with the banks, and it is also connected to the 'good start' products marketed by various banks. The interest rate range is between 3.5% and 5%. About %. If the customer is an employee of a high-quality company and has good credit qualifications, the interest rate can be as low as 3%. Among the customers who lend money, 20% use this loan to repay their mortgage or pay a down payment, and more than 30% Customers use the money to restructure their debts and repay loans, and some customers use the money for other investments."
When a reporter from Beijing Business Daily clearly mentioned that using consumer loans to repay housing loans was a violation, the loan intermediary mentioned, "This is how they operate. As long as the loan funds do not flow directly into real estate, it is not a violation."
In order to confirm the statement of the loan intermediary, a reporter from the Beijing Business Daily consulted a number of banks. Bankers all responded that consumer loans to purchase houses were illegal operations. However, some bank personal loan managers did not deny it and just said vaguely, "It is true." Some customers do this."
As for the question of whether customers can use consumer loans to repay the remaining mortgage loans, some local bankers said, "Although this method is feasible, it needs to be 'replaced' through cash withdrawals, transfers, etc. In the past, customers also borrowed loans from our bank and repaid them. After choosing a mortgage from another bank, the customer felt that the interest rate was very low and it was very cost-effective.”
Financial consumers have needs, loan intermediaries are adding fuel to the fire, and banks are acquiescing. With the cooperation of many parties, the management of personal consumption loans is not in place, and the misappropriation of credit funds is a persistent problem. In response to violations, supervision has repeatedly reiterated that it will focus on risk prevention and control in key areas and weak links, strictly investigate the misappropriation of consumer loan funds, and prevent the risk of real estate bubbles.
A common trend is that although banks still "love" consumer loans, they have begun to significantly reduce their focus on "sinking" customer groups, and they have also placed more emphasis on "equal emphasis on risk and scale." Jing Chun bluntly said that currently, all banks are strengthening post-loan management for consumer loans. Taking China Guangfa Bank Beijing Branch as an example, our bank has an internal post-loan capital flow monitoring system. If any abnormal use of the borrower's funds is found, we will We will intervene in a timely manner to warn customers and verify the specific uses of loan funds. If appropriate, we will also take necessary measures such as withdrawing loans and suspending loan limits.
Wang Deyue, a lawyer at Beijing Xunzhen Law Firm, suggested that banks should strengthen customer identity verification to ensure the authenticity and accuracy of customer identities and prevent criminals from using false identities to conduct arbitrage activities; banks should establish a suspicious transaction monitoring system to monitor abnormal transactions in real time and analysis, once suspicious transactions are discovered, they should be reported in a timely manner and take corresponding measures; improve the transparency of financial products, fully disclose various fees and risks to customers, help customers better understand product features, and avoid arbitrage caused by information asymmetry Behavior.
How to move forward steadily
Against the background of rising liability-side costs, consumer loans have become a better choice for banks to allocate assets. Promoting the smooth and stable expansion of consumer loans and controlling the two-way optimization of the total amount and price of high-cost deposits will help alleviate the pressure of narrowing interest margins.
Affected by multiple factors such as multiple reductions in LPR (loan market quotation rate), continued concessions to the real economy, and repricing of existing loans, the downward pressure on bank interest margins remains unabated. Judging from the third quarterly reports released by A-share listed banks, the net interest margin indicators of the six major state-owned banks have all declined. Among joint-stock banks, the net interest margin indicators of banks such as Ping An Bank, Hua Xia Bank, China Merchants Bank, and Shanghai Pudong Development Bank all fell. Overall, according to data disclosed by the State Administration of Financial Supervision, in the third quarter of 2023, the net interest margin of commercial banks was 1.73%, the lowest in history.
In the future, the integration of finance and scenarios will continue to accelerate, consumer loans will continue to advance by leaps and bounds, and differentiation will become a common pursuit of all banks. During the interview, many bankers expressed high expectations for the expansion of consumer loan financial scenarios.
Jing Chun revealed that according to the development plan, China Guangfa Bank will vigorously support the expansion of domestic demand in its consumer loan business in 2024, using credit consumer loans as the starting point to increase financial support for consumer hotspots such as digital consumption, green consumption, and new energy vehicles. support.
Some bankers also mentioned that banks can provide differentiated consumer loan products for different consumption scenarios, different customer groups, different loan terms, etc., to meet the needs of a wider range of groups and application scenarios; through one-stop online services, Simplify the process and improve efficiency; at the same time, provide personalized services to customers to meet their service demands in different scenarios.
The development of consumer loans requires the joint efforts of many parties. Su Xiaorui pointed out that from a regulatory perspective, regulatory agencies can encourage financial institutions to vigorously develop corresponding services in the process of localized operations based on regional economic characteristics, and can also build corresponding information sharing or service platforms to smooth the communication between financial consumer groups and A communication bridge between financial institutions.
Wang Deyue further suggested that supervision should improve laws and regulations and clarify business specifications to provide a strong guarantee for the healthy development of the consumer credit market. At the same time, market supervision should be strengthened to prevent unfair competition and violations and ensure market fairness and justice. For financial institutions such as banks, they should focus on risk management and internal control. While pursuing business growth, we strictly control risks and ensure the safety of credit funds. In addition, banks need to continuously improve service quality, optimize customer experience, and meet the diverse needs of consumers.
Recently, the State Administration of Financial Supervision also mentioned in its reply to Proposal No. 01384 (Finance, Taxation and Finance No. 100) of the First Session of the 14th CPPCC National Committee that the next step is to prioritize the recovery and expansion of consumption and optimize Financial policy support for key consumption areas. Encourage financial institutions to actively develop financial products and services that meet the characteristics of different consumer groups, focus on meeting the needs of new citizens, develop more marketable financial products, encourage the consumption of bulk commodities such as housing and automobiles, and focus on education, culture, sports, In key areas such as entertainment, we will strengthen comprehensive financial support for service consumption.
Consumers should also learn basic financial knowledge, understand the risks and responsibilities of consumer credit, and improve their financial literacy. Wang Deyue reminded that we should establish a rational consumption concept, avoid blind consumption and excessive borrowing, and arrange borrowings reasonably according to our own economic strength and consumption needs; enhance our awareness of self-protection, understand our own rights and rules, and prevent consumer credit fraud and bad credit behaviors.
On the one hand, it is the need to expand domestic demand and promote consumption, and on the other hand, there is fierce competition among banks. As the market "cake" continues to grow, consumer loans will surely return to rationality from the fiery and usher in their own "flowers."
Beijing Business Daily reporter Song Yitong