The transfer of licenses for the former leader in the consumer finance industry has made new progress!
On the evening of December 20th, Tianjin Bank, which is listed in Hong Kong, announced that it will participate in the restructuring of Jiexin Consumer Finance Co., Ltd. (hereinafter referred to as "Jiexin Consumer Finance") with multiple companies including Guangzhou Jingdong Trading Co., Ltd. and Online Banking (Beijing) Business Service Co., Ltd.
Among them, Guangzhou Jingdong Trading Co., Ltd. and Online Banking (Beijing) Business Service Co., Ltd. are both subsidiaries of JD Group. After the restructuring is completed, the two companies will jointly hold 65% equity of Jiexin Consumer Finance.
It is reported that multiple buyers have been in contact with the transfer of the Jiexin Consumer Finance license, and news about JD taking over has been circulating in the community several times. And ultimately, JD.com is also expected to fulfill its wishes.
JD.com is expected to take over
According to the work arrangement disclosed in the announcement of Tianjin Bank, relevant parties will adjust the registered capital of Jiexin Consumer Finance from 7 billion yuan to 5 billion yuan through equity restructuring methods such as first reducing capital and then introducing strategic investors to increase capital.
Specifically, the capital reduction procedure involves a decrease in the registered capital of Jiexin Consumer Finance, and Home Credit N.V. (Jiexin Group) does not receive any capital reduction or payment from Jiexin Consumer Finance during the capital reduction procedure.
The capital increase procedure involves introducing Guangzhou Jingdong Trading Co., Ltd., Online Banking (Beijing) Business Service Co., Ltd., Foreign Trade Trust, Tianjin Economic and Technological Development Zone State owned Assets Management Co., Ltd., and Tianjin Bank as new shareholders. After the capital increase, the registered capital will be changed to 5 billion yuan.
Among them, Guangzhou Jingdong Trading Co., Ltd. and Wangyin Online (Beijing) Business Service Co., Ltd. are both subsidiaries of JD Group, and will jointly hold 65% equity of Jiexin Consumer Finance after the restructuring is completed.
This is also in line with the "Management Measures for Consumer Finance Companies" officially implemented in April this year. The new regulations will increase the minimum registered capital of consumer finance companies from 300 million yuan to 1 billion yuan, and the shareholding ratio of major investors from no less than 30% to no less than 50%.
In addition, Foreign Trade Trust and Tianjin Economic and Technological Development Zone State owned Assets Management Co., Ltd. will respectively hold 12% and 11% equity of Jiexin Consumer Finance after the restructuring. The shareholding ratio of Jiexin Group, which originally held 100% equity of Jiexin Consumer Finance, will be reduced to 2%.
Tianjin Bank contributed 500 million yuan to participate in the equity restructuring of Jiexin Consumer Finance led by JD.com, with a contribution ratio of 10% in the restructured consumer finance company.
The announcement also revealed that before the completion of the restructuring, Jiexin Consumer Finance will properly settle, restructure or dispose of all its financing liabilities, related party liabilities and operating liabilities.
Former industry leader
As one of the first four pilot consumer finance companies approved by the former China Banking Regulatory Commission, Jiexin Consumer Finance was registered and established in Tianjin in 2010, and is also the first foreign-owned consumer finance company in China.
In 2016, Jiexin Consumer Finance entered a period of rapid development and seized the offline market dividend. Later, in 2019, it exceeded 100 billion yuan in scale, becoming the first consumer finance company in the industry with assets exceeding 100 billion yuan.
However, in 2020, the company's operating performance declined significantly, with a year-on-year decrease of 88% in net profit. Regarding this, Jiexin stated that the decline in profits is mainly due to a significant decrease in credit demand and a noticeable contraction in credit business scale under the impact of the epidemic. Subsequently, Jiexin Consumer Finance did not disclose any annual reports.
In May 2021, United Credit Ratings announced that the Jiexin Consumer Finance entity and "19 Jiexin Consumer Finance Bond 01" were included in the credit rating observation list. Previously, the credit rating of Jiexin Consumer Finance entity and related bonds was AA+, with a stable rating outlook.
United Credit Ratings also believes that the significant losses incurred by the parent company of Jiexin Consumer Finance, Jiexin Group, and the death of its controlling shareholder may to some extent affect the parent company's support for Jiexin Consumer Finance.
While facing business difficulties, news about the transfer of the Jiexin Consumer Finance license has been circulating frequently. Potential successors include both mutual finance platforms and commercial banks, but progress has been delayed due to historical burdens, prices, and other factors.
In August 2023 and June 2024, Jiexin Consumer Finance will transfer approximately RMB 17 billion and RMB 26.4 billion of non-performing assets to two local AMCs (asset management companies) respectively, and transfer non-performing asset packages in bulk through the Yindeng Center.
In the past year, the equity of Jiexin Consumer Finance has been pledged multiple times by Jiexin Group, including two pledges to Tianjin Bank and one pledge to Foreign Trade Trust. And the two pledgees ultimately appeared on the list of participants in the restructuring of Jiexin Consumer Finance.
Tianjin Bank announced that investing in Jiexin Consumer Finance is beneficial for the bank to expand its inclusive finance customer base, enhance its inclusive finance development capabilities, promote mutual promotion and coordinated development with other investors, advance professional market-oriented operations, innovate financial products, and improve profitability.
