The first half performance reports of over a dozen licensed consumer finance companies in China point to a highly variable performance during the peak period for the COVID-19 pandemic.
15 out of China’s 27 licensed consumer finance companies have released their performance reports for the first half, pointing to a slight diminution in total assets.
Total assets of the 15 consumer finance companies was 284.877 billion yuan as of the end of the first half, for a decline of 0.49% compared to the end of 2019.
Nine of these firms saw their assets decline by between 0.67% and 8.55% in the first half compared to the end of 2019, while four of them also posted YoY declines.
Haier Consumer Finance saw its net profits decline by 8.55% in the first half to 9.41 billion yuan, for a YoY fall of 4.13% and the largest decline out of consumer finance companies that have made their results publicly available
Hubei Consumer Finance saw a 3.05% decline in its total assets to 8.5904 billion yuan in the second half, for a YoY fall of 1.59%.
Revenue and net profit results varied immensely, with Bank of Hangzhou Consumer Finance, Shengyin Consumer Finance and Changyin Wuba Consumer Finance all seeing YoY growth in operating revenues of over 200%, and sizeable gains in net profits.
Shengyin Consumer Finance saw a YoY rise in net profits of 304.63%, while Bank of Hangzhou Consumer Finance posted a leap of 245.86% and Industrial Bank Co., Ltd. an increase of 20.36%.
The net profits of at least six Chinese consumer finance companies fell in the first half however, with Hubei Consumer Finance, Shangcheng Consumer Finance and Haier Consumer Finance posting YoY declines of 93.48%, 91.80% and 70.33% respectively.
Yu Baicheng (于百程), head of the Lingyi Research Institute (零壹研究院, said that the sudden onset of the COVID-19 pandemic led to a slide in the macro-economy, and as a consequence a decline in the repayment capabilities of both enterprises and individuals, a rise in debt defaults, an increase in the bad assets of financial institutions and an increase in risk provisions.