21 Financial Research: When credit card bad-favor soars, when will it end?

Guide: 21 Financial Research Institute has observed that in the first three quarters of this year, bad credit card ABS has issued more than 4.5 billion yuan, compared with 5.7 billion yuan for the whole of last year.

There is no doubt about the impact of the new crown pneumonia epidemic on the personal finance business of banks. The 2020 semi-annual report of the banking industry shows that the NPL ratio of most banks’ credit cards has risen significantly compared with the end of last year. Banks have tightened their risk control requirements, and the offline consumption scene has been impacted, and the growth of credit card overdraft balances has slowed down.

However, according to the situation explained in the half-year performance conferences of various banks, the most dangerous time is the first half of this year. As the epidemic improves in the second half of the year, the retail business that uses credit cards as a breakthrough will still return to the right track of growth, and the transformation of retail banks will not So turn.

At present, commercial banks mainly rely on the collection and write-off of the non-performing assets of credit cards, and the release of this piece of non-performing assets has positive significance in revitalizing existing assets, releasing credit scale, reducing non-performing assets, and improving liquidity. It is the disposal of credit cards. An important supplement to non-performing assets.

21 Financial Research Institute has observed that in the first three quarters of this year, bad credit card ABS has issued more than 4.5 billion yuan, compared with 5.7 billion yuan for the whole of last year. Among them, the one with the largest issuance amount is the “Jianxin 2020 Phase 4 Distressed Asset-backed Securities” of China Construction Bank, with an amount of 472 million yuan. In addition, China Merchants Bank, the “king of retail”, and Shanghai Pudong Development Bank, which is pushing the retail side this year, are more active, issuing 4 orders respectively.

The epidemic squeezed the credit card bubble

“In the previous quarter, many of the original high-quality retail customers, such as customers with monthly salary of 30,000-40,000 yuan and mortgage of about 20,000 yuan, suddenly experienced liquidity difficulties, which made it difficult to repay debt and interest. However, as the impact of the epidemic weakened, this part People’s work and life have returned to the past, and the overdue situation has improved.” A manager of East China City Commercial Bank said.

According to the statistics of 21 Institute of Finance, most of the major banks and joint-stock banks in the listed banks have soared bad credit cards compared with the end of last year.

Among the major banks, ICBC, China Construction Bank, Agricultural Bank of China, Bank of China, Bank of Communications, and Postal Savings Bank have reached 2.65%, 1.17%, 1.81%, 2.57%, 2.90%, and 1.99%, respectively, up 0.44 and 0.14 from the end of the previous year. , 0.24, 0.35, 0.52, 0.25 percentage points.

Among them, the non-performing rate of Bank of Communications’ credit cards is relatively high, and the negative growth momentum is slightly stronger.

A person close to the Bank of Communications Credit Card Center revealed that the Bank of Communications credit card has undergone a strategic contraction since last year. The main purpose is to deal with external risks. Superimposing the epidemic this year will make the current indicators not very attractive. However, credit card risks generally lag 6-9 months. For banks with a contraction strategy, asset scale grows slowly or even negatively as the denominator, and risk indicators reflect the risks of the previous period and will not shrink accordingly. The increase in the numerator and the decrease in the denominator correspond to an increase in the defective rate.

In short, after the initial risk is fully exposed, due to the unauthorized increase in the amount, the new bad credit card will decrease month by month, which will eventually drive the overall decline in the bad rate and achieve a “safe landing”.

Due to the difficulty in increasing the consumption power of residents due to the epidemic, coupled with bank credit card departments taking the initiative to increase risk control requirements, the two data of credit card issuance and overdraft balance have quietly changed, which are very different from the double-digit growth in previous years.

21 Among the 14 banks that disclosed data on overdraft balances compiled by the Institute of Finance, 7 increased from the end of the previous year and 7 decreased. Moreover, even the banks that achieved growth failed to exceed 10%, and the highest growth rate was Industrial Bank, which reached 8.64%. In recent years, China Merchants Bank, Shanghai Pudong Development Bank, and Ping An, which have focused more on retail business, all have negative growth in this data.

It is worth mentioning that the management of CCB stated at the press conference that it has become the “largest retail credit bank”, and its overdraft balance has exceeded ICBC and China Merchants Bank, ranking first.

Judging from the data on the number of cards in circulation/accumulated card issuance, many banks are more cautious in issuing cards in the first half of the year. Among the 14 banks that disclosed this data, one experienced negative growth. ICBC rose only 0.14%, China Merchants Bank rose only 1.14%, Shanghai Pudong Development Bank rose only 0.13%, and Ping An rose 1.90%. More than 10% are only the Postal Savings Bank.

The epidemic has indeed delayed the expansion of bank credit cards.

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