2023 was a year in which the scale of bank personal loans exploded. Major banks maintained low non-performing rates while growing in scale. However, what cannot be ignored is that the high non-performing asset ratio of some small banks for personal loans has become a drag.

Personal business loans exploded in 2023, and the non-performing rate of major banks remained low

There are two main types of personal business loans on the market. For customers with collateral, the interest rate on operating loans is about 3%, and the maximum loan amount can reach 10 million depending on the value of the property; for unsecured products that only rely on credit, the interest rate will be slightly higher, and the loan amount is usually in the range of 30-500,000. In terms of risk, unsecured loans are much higher than those secured by real estate.

In fact, judging from last year's data, personal loans are the focus of retail business growth in various banks.

According to data, as of the end of last year, CCB's personal operating loan balance was 777.481 billion yuan, an increase of 362.137 billion yuan over the previous year, leading the list with a year-on-year increase of 87.19%. The Postbank's personal microfinance balance as of the end of 2023 was 1392.227 billion yuan, an increase of 257.033 billion yuan over the end of the previous year, an increase of 22.64%, reaching a record high.

In addition, the three major state-owned banks, the Industrial and Commercial Bank, the Bank of Communications, and the Agricultural Bank also had the highest year-on-year growth rates of 44.85%, 43.02%, and 29.36%, respectively. The loan balances were 1347,136 billion yuan, 342.98 billion yuan, and 745.993 billion yuan, respectively.

Looking at the non-performing rate, in 2023, ICBC's non-performing loan ratio for personal operations was 0.86%, down 0.05% from 0.91% last year; CCB's non-performing loan ratio for personal operating loans was 0.95%, up 0.3% from 0.65% last year; and Agricultural Bank's non-performing loan ratio for personal business loans was 0.76%, compared to 0.65% in 2022.

Overall, major banks have good risk control over personal business loans, and while increasing capital investment, the non-performing rate has remained relatively low.

The non-performing operating loan ratios of Yibin and Bank of Chongqing reached 6.21% and 4.42% respectively

However, there are also areas that are easily overlooked, and some banks' personal business loan products have become bad high-risk areas.

Blue Whale News found that in stark contrast to the “steady” performance of major banks, some banks had a non-performing rate of over 6% last year. Most of the products behind this were unsecured small and micro loans.

For example, Yibin Bank's non-performing personal loan ratio in 2023 was 4.12%, of which the personal commercial loan non-performing ratio reached 6.21%.

The reporter learned that Yibin Bank's personal business loans provide personal business loans to individual borrowers (such as small and micro business owners, individual businesses, and other retail bank customers) to meet the working capital and other operating needs of their business. For example, the bank launched the “Kannu Plan” to launch a small-amount, revolving, and unguaranteed loan product for “money swooning” registered merchants.

Industry insiders said that “Money Loans” is a consolidated payment product. From the perspective of product design, this type of loan is a revolving credit line based on merchants with a steady flow of daily operating transactions, solving the problem of small business financing difficulties caused by insufficient collateral guarantees.

In terms of scale, Yibin Bank's personal commercial loans decreased by 25.9% from RMB 2,892 million as of December 31, 2021 to RMB 2.14 billion as of December 31, 2022. Mainly due to continuing to settle offsite internet loans in accordance with relevant regulations, the scale remained stable from 2022 to 2023.

The same situation also appeared on the Bank of Chongqing. The 2023 report shows that the worst performing loans in the retail sector were also personal business loans. The non-performing loan amount was 995 million yuan, an increase of 445 million yuan over the end of the first half of the year, and the non-performing rate was 4.42%, an increase of 1.96% over the end of the previous year.

The Bank of Chongqing is positioned as a local bank and a bank for small and micro enterprises. Most of them are unsecured loans such as “Liquidity Loans” for settlement users, “Chongqing Trade Loans” for micro, small and medium-sized commercial enterprises, “Communication Chain Express Loans” for telecom dealers, and “New Agricultural Loans” for new agricultural operators.

The size of non-performing assets in personal loans increased 4.5 times, and operating loans faced a centralized renewal period

The data shows that at present, the scale of non-performing assets in bank personal loans continues to increase, and the urgency of disposing of non-performing loans has also become stronger.

According to data released by Yindeng Center, the transaction scale of bank personal non-performing loan batch transfers reached 96.53 billion yuan in 2023, a sharp increase of 449.4% over the full year of 2022, about 4.5 times.

Looking at the types of poor personal loans transfers, in the fourth quarter of 2023, the credit card overdraft category ranked first, with a business scale of 28.89 billion yuan, accounting for 60.8%; the scale of personal consumer loans was 12.16 billion yuan, accounting for 25.6%; and the scale of personal business loans was 6.44 billion yuan, accounting for 13.6%.

It is worth noting that starting in 2020, many people replaced housing mortgage loans with revolving credit operating loans. In 2021, regulations gradually became aware of this issue and issued a notice to track down illegal operating loans. This requires strengthened risk management, registration and regular verification of business loans with a term of more than 3 years. There are even cases where mortgages are directly borrowed in exchange for operating loans. Now that the three-year term has arrived, the operating loan from three years ago has also reached the time for centralized loan renewal.

Currently, banks have not significantly tightened their investment in operating loans, but the review standards are more strict than before.