Xiaomi’s XWBank Crossed RMB100bn in Issued Loans in 20 Months

Online direct bank XWbank (aka. Sichuan Xinwang Bank) had reached RMB 100 billion in consumer loan issuance as of August 2018, only 20 months after its inception in December 2016, according to TodayCFC, a local news outlet focused on consumer finance.

Consumer lending is the bank’s major business that had originated a total of more than 30 million loans to 14 million borrowers as of May 2018. The average loan amount was about RMB3300. The delinquency rate is about 0.27%. The average APR is 18%.

The consumer loan product, named Haorendai (好人贷), is not only available on XWBank’s website and mobile app but also on a variety of Chinese online consumer lending platforms or mobile apps, including Ant Cash Now (the online cash loan product of Ant Financial), Didi (mobile ride-hailing), Lufax (marketplace lending), China UnionPay (interbank network), and Tencent.

Funds are mainly from local commercial banks.

Its in-house developed automated system handles over 99% of the loan originations and spends an average of 40 seconds to process a loan.

XWBank’s other businesses include enterprise banking and custody services for online lenders. (The Chinese regulator requires peer-to-peer lending platforms to use custodians and XWBank is one of the approved custodian banks.)

The bank began to turn a profit in the first quarter of 2018 that generated RMB 58 million, RMB 87 million and RMB 95 million in net profit in Q1, Q2, and Q3, respectively.

XWBank is the third direct private bank in China, after MyBank, affiliated to Ant Financial, and WeBank which is an affiliate to Tencent. Different from XWBank and WeBank, Ant’s MyBank has been focused on SME lending.

Source: WeBank, TodayCFC

Sichuan Silver Mi Technology, a wholly-owned subsidiary of Xiaomi Finance, holds a 29.5% stake in XWBank.

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ChinaFintech – 2017 Results of Ant’s MyBank

MyBank (aka. Zhejiang E-commerce Bank), the online direct bank affiliated to Ant Financial, reports big jump in loan origination volume to RMB 446.8 billion in 2017, compared with RMB 87.9 billion originated during the period between mid-2015 and the end of 2016.

The outstanding balance increased to RMB 96.3 billion at the end of 2017, up from RMB 32.9 billion one year ago. The average loan balance per borrower was RMB 28,000 in 2017, up from RMB 15,000 one year ago.

The total number of business borrowers, the target market of MyBank, had reached 5.7 million as of the end of 2017, up from 2.77 million one year ago.

Duoshou Duodai (多收多贷), a loan product for micro-businesses who use Alipay QR code payment service to accept payments, signed up 1 million customers between June and December 2017. The number would increase to 3 million by June 2018.

The total revenue and net profit increased by 52% and 28%, respectively.

Source: MyBank

In 2017, RMB 26.5 billion worth of loans, or 6% of the total, was made to borrowers located in rural areas. The outstanding balance of rural loans was RMB 3.9 billion, or 11.9% of the total, as of the end of 2017. Rural borrowers reached 750,000, or 1.3% of the total, in 2017.

Delinquency rate was 1.23%. The company has developed a series of big data-based borrower credit assessment and other risk management systems.

The average APR decreased by 1% in 2017. Capital adequacy ratio was 13.5%.

Yulibao (余利宝), a money market fund that allows business customers to buy into with their account balances, had had 6.75 million customers as of the end of 2017. The fund is managed by Tianhong Asset Management Co. Ltd, a mutual fund company majority-owned by Alibaba and the manager of Yu’e Bao (余额宝).

Ant Financial, the digital finance arm of Alibaba, is the biggest shareholder in MyBank that holds a 30% stake in it. Incepted in June 2015, MyBank is one of the three online-only banks in China — The other two are WeBank, an affiliate of internet giant Tencent, and XWBank (新网银行), backed by smart device maker Xiaomi.

While MyBank is focused on serving small businesses especially the merchants of the e-commerce and financial services of Alibaba and Ant Financial, WeBank mainly targets consumers on WeChat and QQ, Tencent’s massively popular messaging apps. Ant Financial’s consumer lending business is operated through two separate small loan companies.

Source: MyBank, WeBank (Click to enlarge)

ChinaFintech – Alibaba’s Business Credit Arm Totals 10M Borrowers

A cumulative total of 10 million businesses on Alibaba and its affiliated platforms took out loans from its business credit arm in the last five years, the company unveiled it at an event earlier this month. Since 2015 the business has been operated by MyBank (网商银行), the online direct bank in which Ant Financial (Alibaba’s finance arm) has a 30% stake.

Duoshou Duodai (多收多贷), a loan product for small and micro-businesses who use the Alipay QR code payment service to accept payments, has signed up 3 million customers since its launch a year ago this month.

MyBank said they’ve decreased the average loan origination cost to RMB 2.3 (US$0.35), with RMB 2 billed for technology, from some RMB 2000, mainly manual labor cost, with traditional lenders.

MyBank announced to open its near-instant lending technology and other tech capabilities to third-party financial institutions. It aims to sign up some 10 million financial institutions and some 30 million small and micro-business customers in the next three years.

ChinaFintech – Tencent’s WeBank Totaled 100M Personal Loans as of 2017

WeBank (微众银行), the direct bank affiliated to Tencent, saw the total originations of personal loans surpassed 100 million in 2017 since its incorporation in 2014, according to WeBank 2017 annual report.

It provides Weilidai (微粒贷), a short-term personal loan product available on Tencent’s messaging apps (WeChat and Mobile QQ), and auto financing product Weichedai (微车贷) to individual borrowers. The outstanding loans of Weilidai reached RMB100 billion (US$15 billion) in 2017, according to Tencent Q4 2017 earnings report. For businesses, WeBank launched Weiyedai (微业贷) in 2017.

The total loan originations and the total number of borrowers increased respectively by 170% and 327% to RMB 870 billion (US$133 billion) and 12 million as of the end of 2017.

92% of the loan balances were less than RMB 50,000 (US$7640). 74% of the loans cost borrowers less than RMB 100 (US$15).

74% of the individual borrowers were in jobs lower paid than white-collars. Loan delinquency rate in 2017 was 0.64%, up from 0.32% for the previous year.

The total outstanding loan balance and assets increased by 55% and 57%, respectively.

Some 50 partnering financial institutions accounted for 75% of the total loan originations.

Total revenues increased by 175% in 2017, with net interest income and servicing fees increased by 140% and 305%, respectively.

Net profit increased by 261%. The average interest rate was down by 45 percent points in 2017.

The total number of registered customers increased by 214% in 2017 to over 60 million. They are located in more than 500 cities across China.

Source: WeBank, MyBank (Click to enlarge)