The credit card business is an indispensable "sharp tool" for banks to increase non-interest income, so major banks have been issuing cards like crazy in the past few years. The recently released 2019 annual reports of listed banks have unveiled the "changes" in the credit card industry. Indicators such as the number of new card issuances and loan scales have declined, and the "crazy credit card" has cooled down.
What makes the rushing banks slow down their frenzied pace of issuing cards? How much impact will the credit card business receive under the impact of the COVID-19 epidemic? Will it have a big impact on the bank’s income?
The number of card issuances has significantly cooled down, with the exception of Postal Savings Bank and CITIC
Judging from the scale of cumulative card issuance, ICBC, China Construction Bank, Bank of China, Agricultural Bank of China, Bank of Communications, and China Merchants Bank have each issued a cumulative card amount of over 100 million. The major state-owned banks still have an absolute advantage, but the growth rate has dropped significantly. The "Big Mac" ICBC still ranks first in terms of cumulative credit card issuance volume, reaching 159 million by the end of 2019, an increase of 5.3% from the end of the previous year. Followed by China Construction Bank, Bank of China, Agricultural Bank of China, and Bank of Communications, reaching 133 million, 125 million, 120 million, and 120 million cards respectively. The most common point is that the growth rate has slowed down significantly, and the cumulative number of cards issued by some banks has increased. fell rapidly to single digits. CMB did not announce specific figures, but as early as 2017, the cumulative number of cards issued by CMB had exceeded 100 million.
Figure 1: Cumulative issuance of credit cards by some listed banks
Judging from the number of new card issuances, joint-stock banks have cooled down significantly. For example, China Merchants Bank issued approximately 11 million new cards (number of cards in circulation) in 2019, a decrease of 10.85 million from the number of new cards issued in 2018; China Everbright Bank issued 11.4983 million new cards, a decrease of approximately 3.5 million from 2018. ; Ping An Bank issued 14.3 million new cards in 2019, a decrease of 3.07 million from 2018.
However, Postal Savings Bank and China CITIC Bank are exceptions. In 2019, the cumulative number of credit cards issued by CITIC Bank reached 83.325 million, an increase of 24.26% from the end of the previous year. Postal Savings Bank's credit card balance at the end of 2019 was 31.1007 million, a year-on-year increase of 34.64%. In addition, some regional banks' credit card business is still in the expansion period in 2019 due to a low base. For example, Shengjing Bank has issued a total of 1.1035 million credit cards, an increase of 831,200 from the beginning of the year, an increase of 305.25%; Zhengzhou Bank Shangding Credit Card has issued a total of 426,600 credit cards, an increase of 53.67% from the end of the previous year.
China Merchants Bank ranked first in terms of credit card transaction volume in 2019, with Ping An ranking second.
Although the number of card issuances has hit the brakes, the revenue-generating ability of the credit card business has not diminished.
Annual report data shows that among joint-stock banks in 2019, China Merchants Bank’s credit card transaction volume increased by 14.62% year-on-year to 4.34 trillion yuan, setting a new record; Ping An Bank’s credit card transaction volume was 3.34 trillion yuan, a year-on-year increase of 3.34 trillion yuan. increased by 22.5%, and the catching-up momentum is strong. Among state-owned banks, the credit card transaction volume of ICBC and China Construction Bank exceeds 3 trillion yuan.
Figure 2: Credit card transaction volume of some listed banks
In terms of credit card business income, China Merchants Bank achieved credit card income of 79.988 billion yuan, followed by CITIC Bank, with credit card income of 60.509 billion yuan in 2019 , an increase of 31.47% compared with the beginning of 2019; China Everbright Bank was 47.567 billion yuan, a year-on-year increase of 21.84%.
Figure 3: Credit card business income of some listed banks
The proportion of credit card loan growth has generally declined
Annual report data shows that the credit card loan balance of most banks in 2019 There has been significant growth, but its share in total loans has generally declined.
As of the end of 2019, state-owned banks and joint-stock banks had larger credit card loan balances. Among them, the balance of CCB’s credit card loans was 741.197 billion yuan, an increase of 13.79% from the end of the previous year. Followed by ICBC, the balance of credit card loans was 677.933 billion yuan, an increase of 8.20% from the end of the previous year. Among joint-stock banks, the balance of China Merchants credit card loans reached 671.099 billion yuan, an increase of 16.61% from the end of the previous year. In addition, the loan balances of Ping An and CITIC both exceed 500 billion yuan.
Figure 4: Credit card loans and proportions of some listed banks
In terms of proportion, as of the end of 2019, Ping An Bank had the highest proportion of credit card loans in total loans, but Its proportion decreased by 0.4 percentage points compared with 2018 to 23.30%. In addition, banks accounting for more than 10% include China Merchants, Minsheng, Everbright and Pudong Development Bank. Among them, only China Merchants' credit card loan proportion increased slightly, while the other three banks all declined.
Overall, the proportion of credit card loans of listed banks has generally declined. However, a few banks that have only started credit card business in recent years, such as Bank of Qingdao, have seen significant growth in their credit card loan balances and proportions.
The defective rate is rising, and the impact of the epidemic has made the situation worse
In the past few years, we were very motivated to issue cards, but now we have to face the "mid-life crisis". Disclosed bank annual report data shows that except for the decline in the credit card non-performing rate of Shanghai and Jiangsu banks in 2019, other banks have increased across the board. The non-performing credit card rate of Minsheng Bank in 2019 reached 2.48%.
Figure 5: Credit card non-performing ratios and non-performing loan balances of some listed banks
Behind the rise in non-performing ratios are the sequelae of the previous aggressive expansion of credit cards. In order to gain momentum, customer qualifications have declined. It will inevitably bring hidden dangers. The outbreak of Internet loan risks such as cash loans and P2P in 2018 was further transmitted to the credit card industry, thus triggering an increase in industry-wide risks.
To make matters worse, under the impact of the COVID-19 epidemic in the first quarter of this year, the credit card business was further under pressure, and the non-performing rate was the most worrying.
Tian Huiyu, President of China Merchants Bank, said frankly at the performance meeting, “Among all the businesses of China Merchants Bank, the credit card business has been the most affected by the epidemic. Not only in terms of transaction volume, the epidemic has also affected credit card business. The quality of assets. Credit card transaction volume, asset quality, and credit card overdrafts have all declined significantly in the short term. ”
Ping An Bank’s first quarter report for 2020 showed that due to the epidemic, credit card consumption declined in the first quarter. , as of the end of March, the balance of credit card loans was 515.863 billion yuan, a decrease of 4.5% from the end of the previous year; the total credit card transaction amount was 777.164 billion yuan, a decrease of 3.0% from the same period last year. In addition, affected by the widespread shutdown of work and production caused by the epidemic, residents' income dropped and consumer demand shrank, the credit card non-performing rate increased in the first quarter, with the non-performing rate rising by 0.66 percentage points to 2.32%.
The annual reports of listed banks reflect the changes in the credit card business, which may also promote the change in the development thinking of the credit card business, from simply pursuing scale expansion to paying more attention to precise risk management and control through the onlineization of financial technology. layout, fully explore the scene, and develop a thorough user experience.
This article comes from Bread Finance