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Author: Zhang Liming

Editor | Fu Ying

Source | Unicorn Finance

Three months after Li Rudong stepped down as president of Baixin Bank, his latest whereabouts finally came to light.

On August 12, the Beijing Regulatory Bureau of the State Financial Supervision and Administration Bureau approved the qualifications for the position.Approved by Li Rudong CITIC Consumer FinanceCo., Ltd. (hereinafter referred to as CITIC Consumer Finance)Qualifications for the office of chairman.He is the second chairman of CITIC Consumer Finance since its establishment.

After Li Rudong took office, the challenges facing the new president of Baixin Bank may have just begun.

Li Rudong served as the president of Baixin Bank for nearly 7 years, and the bank achieved a transition from loss to stable profit..but,Rating agency United Credit pointed out thatalthoughBaixin BankThe advantages are obvious, butWeak growth in savings deposit business、The scale of corporate loan business has declined、Market-integrated funds account for a high proportionThe adverse impact that factors such as the above may have on its credit rating.

1

Former president takes new post

Li Rudong joined CITIC Bank in 1996. Prior to that, he was the first president of CITIC Bank A-Bank. He resigned in May this year due to work adjustments. According to public information, after resigning as president of A-Bank, Li Rudong joined CITIC Consumer Finance. He also visited the Western Financial Legal Service Center in June this year.

Before being responsible for the establishment of Baixin Bank, Li Rudong was the head of the electronic banking department of CITIC Bank.

Regarding this personnel change, CITIC Consumer Finance told The Paper that the new chairman has a deep understanding and management experience in the consumer finance industry and will further promote the company's high-quality development. The selection of the new director shows that CITIC Group and CITIC Financial Holdings attach great importance to and support the development of CITIC Consumer Finance.

Baixin Bank was jointly established by China CITIC Bank and Baidu. In 2017, the former China Banking Regulatory Commission approved the opening of Baixin Bank and the qualifications of the bank's senior executives, including the then president Li Rudong. According to this calculation, this year is exactly the seventh year that Li Rudong has served as the president of Baixin Bank.

It seems that Li Rudong still could not escape the "seven-year itch" in the workplace.

Image source: Canned Image Library

at present,The controlling shareholder of Baixin Bank is China CITIC Bank, and the second and third largest shareholders are Fujian Baidu Borui Network Technology and Canada Pension Plan Investment Board.Therefore, among the senior management of Baixin Bank, there are many executives who have worked in CITIC Bank, and the new president Kou Guan is one of them.

Kou Guan was appointed as the Vice President and Chief Information Officer of Baixin Bank in August 2017, and has served as the General Manager of the Information Technology Management Department of CITIC Bank since March 2019. In June 2022, he also served as the General Manager of the Technology Operations Center of CITIC Bank.

At present, the technology sector of CITIC Bank is mainly composed of the Information Technology Management Department, Software Development Center, Big Data Center, and Technology Operation Center, forming a "one department and three centers" structure. Kou Guan's experience in the department involves the Information Technology Management Department and the Technology Operation Center.

It can be seen thatBoth the first president Li Rudong and the successor president Kou Guan are senior scientific and technological management talents.As of the end of 2023, Baixin Bank had a total of 1,025 employees, of which 60.3% were technical personnel, which shows how much the bank attaches importance to technical personnel.

2

The new president's challenges

According to his public resume, from August 2017 to March 2019, Kou Guan served as the vice president and chief information officer of Baixin Bank; since March 2019, Kou Guan has served as the general manager of the Information Technology Management Department of CITIC Bank; since June 2022, Kou Guan has also served as the general manager of the Technology Operations Center of CITIC Bank.

butIn terms of performance, the new president still faces considerable challenges.

On April 30, Baixin Bank disclosed its 2023 annual report. The announcement showed thatIn 2023, Baixin Bank achieved a net operating income of 4.534 billion yuan, a year-on-year increase of 14.27%; net profit of 855 million yuan, a year-on-year increase of 30.25%Among them, net interest income was 4.167 billion yuan, an increase of 11.31% year-on-year, accounting for 91.91%; non-interest net income was 367 million yuan, an increase of 63.62% year-on-year, accounting for 8.09%.

Image source: Canned Image Library

Despite the growth in both revenue and net profit,The growth rate of Baixin Bank's performance has slowed down significantly compared with the growth in previous years., especially the decline in net profit growth.

If compared horizontally with WeBank and MyBank, which are also Internet banks, the performance of A1 Bank, which is backed by two giants, China CITIC Bank and Baidu, is much inferior.

From 2021 to 2023, WeBank's revenue was RMB 26.989 billion, RMB 35.364 billion, and RMB 39.361 billion, respectively, and its net profit was RMB 6.884 billion, RMB 8.937 billion, and RMB 10.815 billion, respectively. MyBank's revenue was RMB 13.9 billion, RMB 15.686 billion, and RMB 18.743 billion, respectively, and its net profit was RMB 2.092 billion, RMB 3.538 billion, and RMB 4.2 billion, respectively, during the same period.

Taking the performance in 2023 as an example, Baixin Bank's revenue is only about one-ninth of WeBank and about one-quarter of Ant Financial Services Group's; its net profit is only one-twelfth of WeBank and one-fifth of Ant Financial Services Group's.

In terms of asset size, as of the end of 2023, the total assets of the "first-tier" WeBank reached 535.58 billion yuan, and that of MyBank was 452.13 billion yuan. The asset size of Baixin Bank was 116.356 billion yuan, slightly less than that of Jiangsu Commercial Bank, which is also in the "second tier", reaching X billion yuan, which is 3.845 billion yuan less.

In addition, in recent yearsThe scale of non-performing loans of Baixin Bank continues to expand.

As of the end of 2023, Baixin Bank's non-performing loans reached 1.126 billion yuan, up 1.99% year-on-year from 1.104 billion yuan at the end of 2022, and the non-performing loan ratio was 1.36%, down 0.12 percentage points from the beginning of the year.。

Baixin Bank said that since 2019, the bank's credit balance has maintained steady growth. At the same time, it has stepped up efforts to dispose of non-performing assets and strengthened asset quality control, achieving a steady decline in the non-performing rate.

In 2023, the bank's core tier 1 capital adequacy ratio was 10.61%, down 0.55 percentage points year-on-year; the tier 1 capital adequacy ratio was 10.61%, down 0.55 percentage points year-on-year; the capital adequacy ratio was 14.37%, down 1.04 percentage points year-on-year; and the leverage ratio was 6.29%, down 0.23 percentage points year-on-year.

In order to resolve bad risks, Baixin Bank has increased its loan impairment provision, and the provision coverage ratio has climbed from 233.90% in 2019 to 274.83% in 2022. In 2023, the bank's provision coverage ratio will further increase to 303.76%, a year-on-year increase of 1.66 percentage points. The overall provision is sufficient and the risk compensation barrier is relatively thick.

Source: Baixin Bank announcement

However, United Credit stated in its follow-up rating report that although Baixin Bank's corporate deposit business has developed well and its loan provisions are sufficient, factors such as the bank's weak growth in savings deposit business, a decline in the scale of its corporate loan business, and a high proportion of market-integrated funds may have an adverse impact on its credit level.

Currently, Baixin Bank’s business scope covers wealth management, consumer finance, industrial digital finance, bill business, etc. However, behind the expansion of business scale, asset quality risks have also begun to be exposed.

3

The pros and cons of personal consumer loans

Consumer loans are one of the main areas of Baixin Bank's efforts in recent years. Personal consumer loans mainly include two categories: self-operated loans and platform loans. Compared with large and medium-sized banks, Baixin Bank's customer base is more down-to-earth.

Image source: Canned Image Library

According to the bank's 2023 financial report disclosed on its official website, "During the reporting period, the bank actively responded to the national policy orientation of restoring and expanding consumption, launched 12 work measures to support the restoration and expansion of consumption, continued to increase consumer credit issuance, and helped release residents' consumption potential.In 2023, the total amount of consumer finance loans issued exceeded RMB 180 billion. As of the end of the reporting period, the total number of new urban residents served exceeded 53 million, accounting for 55% of the total number of users of the Bank.

According to the "BaiXin Bank 2024 Tracking Rating Report" released by United Credit Rating, BaiXin Bank's personal consumption loans mainly include two categories: self-operated loans and platform loans; among them, self-operated loans refer to independently operated and differentiated priced consumer loan business conducted through various scenarios through brand promotion, joint marketing, customer recommendations, etc.; platform loans mainly refer to loans that cooperate with cooperative institutions and introduce guarantee companies or insurance companies to provide credit enhancement services.

According to the self-media "Tiantian Finance 116", a user revealed to the media that he had taken out a loan on the Internet platform "Tiancheng Borrowing Money". When submitting personal information and credit authorization letters, the authorized cooperative institutions included dozens of financial companies such as Baixin Bank and Harbin Bank Consumer Finance.

The benefit of cooperating with third-party platforms and developing a large number of personal consumer loans is undoubtedly that it can obtain a large amount of traffic to acquire customers and expand the asset side; but the disadvantages are also very obvious, that is, Baixin Bank will have a lot of complaints.

On the Black Cat Complaint Platform, searching with the keyword "Bai Xin Bank" yields 4,695 complaints involving the bank. The types of complaints include indiscriminate reporting of credit records, stealing personal information resulting in credit records, unreasonable interest charges, etc. The hardest hit area of ​​complaints is violent debt collection.

Source: Black Cat Complaint

According to the 2023 annual report of Baixin Bank, the bank received a total of 31,800 customer complaints throughout the year, of which personal loan business accounted for 89.77%.

Source: Annual Report

Unicorn Finance noted thatBaixin Bank is also gradually optimizing its customer structure.

The "2024 Tracking Rating Report of Baixin Bank" released by Lianhe Credit shows that in 2023, Baixin Bank will strengthen its collaborative operation mechanism, focus on the management of advantageous customer groups, actively adjust its customer acquisition structure, and continuously improve its user management capabilities.; By entering the CITIC Bank APP, we fully leverage the differentiated and complementary advantages of our self-operated consumer finance product "Haohuihua" and CITIC Bank's product "Xin Miaodai", effectively improving the conversion rate of new customer traffic and the proportion of high-quality customers, and achieving rapid development of our self-operated loan business as a whole.

In terms of platform loan business,In 2023, Baixin BankFurther improve the product system and implement the lightweight development strategy.By adjusting and optimizing business and expanding high-quality assets, we will continue to add high-quality platform partners on the original basis, effectively supplement high-quality assets and customer base, and achieve dual optimization of cooperative institutions and consumer customer base.

also,In 2023, Baixin Bank will continue to improve its concentration risk management system, continuously strengthen the identification, assessment, monitoring, reporting and disposal of concentration risks, and clarify the concentration risk management requirements for various businesses.，Strictly implement concentration risk limit indicators, strengthen the monitoring of asset, liability and income concentration; carry out real-time tracking and monitoring of large risk exposures, and strengthen automated monitoring and early warning of concentration of various businesses.

What improvements will the new president bring to the bank after taking office?Welcome to leave a message in the comment section.