Online Banks Outperform China’s Conventional Lenders in 2018

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The latest financial reports of China’s online banks points to a bumper year in 2018, far outpacing the performance of listed domestic lenders.

Tencent’s WeBank saw its assets breach the 200 billion yuan threshold in hit 220 billion yuan at the end of 2018, for an increase of 169% compared to the start of the year.

WeBank’s managed loan balance exceeded 300 billion yuan while its on-balance sheet loan balance was 119.8 billion yuan, for an increase of 151% compared to the start of 2018. The online lender’s customer base reportedly exceeds 100 million borrowers.

Operating revenues rose 48.63% YoY in 2018 to hit 10.03 billion yuan, while net profits were 2.474 billion yuan for a YoY rise of 70.85%.

Ant Financial-backed MyBank saw operating revenues of 6.284 billion yuan in 2018 for YoY growth of 46.96%, while net profits saw YoY growth of 66.09% to reach 671 million yuan.

MyBank says it has provided its financial services to 12 million micro and small-borrowers, as well as extended its focus on the rural village market.

As of the end of 2018 MyBank’s total assets were 95.9 billion yuan, for a YoY rise of over 20%.

Sichuan-based XWBank also managed to reverse losses seen in 2017, posting net profits of 368 million yuan last year.

WeBank’s non-performing loan ratio fell to 0.51%, while MyBank’s saw a modest rise to 1.3%, and XWBank’s lifted to 0.39%.

As online lenders touting financial inclusion, both WeBank and MyBank saw steady declines in loan rates.

The average interest rate for new lending by WeBank last year fell by nearly one percentage point compared to 2017, while for small and medium-sized enterprises the decline exceeded two percentage points.

MyBank’s average lending rate fell by one percentage point in 2017 and 1.2 percentage points last year.

Online lenders are also stepping up their fintech research and development efforts, particularly with regard to blockchain applications and artificial intelligence.

WeBank’s tech R&D investment was 980 million yuan in 2018, for a YoY rise of over 50%.

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