Event: on February 20, 2021, the General Office of the Bancassurance Regulatory Commission issued the notice on further standardizing the Internet loan Business of Commercial Banks, patching the interim measures for the Administration of Internet loans of Commercial Banks and putting forward three quantitative indicators for joint loans of commercial banks: (1) the contribution proportion of partners in a single loan shall not be less than 30%. 2 the balance of the bank's loan issued with a single partner shall not exceed 25% of the net tier one capital. 3 the balance of the Internet loan shall not exceed 50% of the total loan balance. The notice also restricts the cross-regional operation of local banks.
Comments:
The overall impact is small, and the cooperation mode will be skewed towards loan aid.
The main focus of the notice is the limitation of the proportion of capital contribution. It is not difficult to meet other requirements. This will prompt partner institutions to increase their capital, or require banks to take the initiative to reduce the proportion of joint loans and increase the proportion of assisted loans. Because the loan aid belongs to the category of credit information, and the cooperative institution does not involve the proportion of capital contribution, if the cooperation mode can be changed to the loan aid, the bank can still maintain the stability of the loan scale, and the cooperative institution will also reduce the pressure of transformation.
As the cooperative institution of small and medium-sized banks, large banks may be the new option to hold the working meeting of the Banking and Insurance Regulatory Commission in 2021 on January 27, which proposed for the first time to "promote large banks to export risk control tools and technologies to small and medium-sized banks." Combined with the analysis of the terms of this notice, the conditions for large banks to act as joint loan cooperation institutions in the future are more mature. Banks with deep retail business will gain more significant advantages, such asChina Merchants Bank、Ping an Bank等。
Regulatory boots fall to the ground, narrowing regulatory differences is good for the development of banks
The "notice" marks the completion of the phased goal of the recent regulatory system "mending the deficiency board" for Internet loans, and the regulatory boots have basically landed. Internet consumer loans of small loan model, non-small loan model and assistant loan model will be subject to the interim measures for the Administration of Network Micro-loan Business (published in November 2020), the notice on further regulating the Internet loan Business of Commercial Banks (this new regulation), and the measures for the Administration of Credit Information Business (draft issued in January 2021). The main effect of this round of regulation is to narrow the regulatory differences between banks and Internet financial institutions, which is intended to break the capital monopoly and bring financial business into the regulatory framework. With the distance of the starting line getting closer, banks will have more obvious advantages in compliance, channels and customers, which is conducive to the market expansion of bank retail business.
The market of bank stocks will continue.
The current economic recovery is clear, and the bargaining power of banks' assets continues to rise. Moreover, due to the fact that supervision opens the main door and blocks the side door, the marginal regulation of traditional finance is relaxed. Since the second half of last year, the domestic systemically important banks and the TLAC framework have been put forward again, indicating that the process of bank capital replenishment and business innovation have entered the fast lane, and the profit growth center of banks is expected to improve this year. At present, the valuation of banking stocks still has a large price comparison advantage over other sectors, and we continue to be optimistic about high-quality targets with light risk burden and rapid retail transformation, such asPostal savings bank、Changshu Bank, China Merchants Bank, Ping an Bank,Societe Generale Bank等。
Risk hints: the epidemic repeatedly impacts the economy; the policy landing speed is slow; the implementation effect of the policy is not as good as expected.