The issuance scale of personal consumer loan ABS products has stabilized and rebounded, and product performance may further diverge in the post-epidemic era.
Yao Dian
From a macro perspective, China's economy will continue to recover in 2021, and the demand for consumer credit will gradually increase, but the growth rate of consumer credit has not yet returned to pre-epidemic levels. As of the end of 2021, the balance of short-term personal consumption loans of financial institutions (including credit cards and consumer loans) was 9.36 trillion yuan, with a year-on-year growth rate of 6.59%;
In terms of policy, regulatory authorities have successively issued a number of policies and normative documents. Further protect personal information and the rights and interests of financial consumers, and standardize credit card operations and Internet loan management;
In terms of issuance, in 2021, the issuance scale of personal consumer loan ABS products has rebounded, and the annual issuance scale is *** 47.188 billion yuan, a year-on-year increase of 25.03;
In terms of issuance interest rates, the issuance interest rate of personal consumer loan ABS product priority (AAAsf) securities is 2.66-6.00, and the issuance interest rate of secondary priority (AA sf/AAsf) securities is 2.66-6.00. It is 2.73-6.50, which has expanded compared with 2020. Compared with the one-year short-term and medium-term bill maturity yield, the AAAsf spread range of personal consumer loan ABS products initiated by commercial banks is -43.22~21.95BP, and the AAAsf spread range of products initiated by consumer finance companies is -21.74~239.06 BP, the issuance interest rates of different originating institutions vary significantly.
In terms of the secondary market, in 2021, the transaction volume of personal consumer loan ABS products was 14.863 billion yuan, an increase of 9.84% compared with the whole year of 2020; there were 107 transactions, with an average amount of 139 million yuan, and the activity of secondary transactions remains to be seen. Improve;
In terms of asset pool characteristics, the asset pool characteristics of personal consumption loan ABS products issued in 2021 continue to show the characteristics of small single amounts and highly dispersed asset pools. The contract interest rate/handling rate of the assets in the pool Maintain at a high level;
Product performance duration:
? In terms of overdue rate, with the normalization of epidemic prevention and control and the full resumption of work and production, the impact of the epidemic on residents' income and daily consumption has gradually weakened, and the overdue performance of the underlying assets of personal consumption loan ABS products issued in 2021 has improved significantly;
? In terms of default rate, the cumulative default rate of personal consumer loan ABS products has been increasing year by year in recent years. In 2021, due to the recurrence of epidemics in some areas and the slowdown in macroeconomic growth, the quality of the asset pool of personal consumer loan ABS products will continue to be under pressure;
? The basic asset recovery rate of personal consumption loan ABS products is generally low, and the early repayment rate varies depending on the characteristics of the product;
China's economy will continue to recover in 2021, and the balance of short-term personal consumption loans will gradually recover, but the growth rate is still not Return to pre-pandemic levels. Affected by the downward macroeconomic pressure and repeated epidemics in some regions, the consumer confidence index fluctuated and declined. As the household leverage ratio remains high, the credit performance of consumer credit may continue to be under pressure. At the same time, regulatory authorities continue to introduce a series of policies aimed at further protecting personal information and the rights and interests of financial consumers, and standardizing credit card operations and Internet loan management.
In the first half of 2021, thanks to the government’s “dynamic clearing” policy, the domestic epidemic has been effectively controlled, residents’ consumption expectations and consumer confidence have continued to recover, and residents’ consumer credit demand has gradually recovered. In the second half of the year, the epidemic spread locally and the downward pressure on the macro economy remained high. Therefore, the growth rate of short-term personal consumption credit in my country slowed down. According to the balance of personal loans of financial institutions, as of the end of 2021, the balance of personal loans of financial institutions was 71.11 trillion yuan, of which the balance of medium and long-term personal consumption loans (mainly housing mortgage loans) was 45.53 trillion yuan, and the balance of short-term personal consumption loans (including credit cards and consumer loans) was 45.53 trillion yuan. ) balance is 9.36 trillion yuan, a year-on-year increase of 19.81 and 11.62
Financial short-term personal consumption loans are mainly composed of credit card loans and personal consumption loans, with credit card loans being the mainstay.
Judging from the use of credit cards, as of the end of September 2021, the cumulative number of credit cards issued has reached 798 million, and the per capita number of cards is 0.57. During the same period, thanks to the gradual subsidence of the epidemic and the low base in the early stage, the total amount of credit card credit was 20.66 trillion yuan, an increase of 11.14% year-on-year; the amount used was 8.40 trillion yuan, an increase of 8.25% year-on-year, but the growth rate has not yet returned to the pre-epidemic level. The credit utilization rate was 40.66, basically the same as last year.
In 2021, under the influence of some negative factors such as repeated epidemics in some areas, power shortages, and real estate company debt crises, the downward pressure on the domestic economy has increased, and the consumer confidence index has shown a volatile downward trend. At the same time, residents’ leverage ratio remained unchanged from the end of last year and remained at a high level.
Residents’ leverage ratio continues to be high and macroeconomic downward pressure increases, which will affect residents’ ability and willingness to repay, thus having a certain negative impact on the credit performance of consumer credit. From the perspective of credit card asset quality, with the effective control of the domestic epidemic, the total number of credit cards overdue for six months has been relatively stable overall. As of the end of September 2021, the total amount of credit cards overdue for six months was 86.926 billion yuan, accounting for 1.04% of the total amount payable by credit cards. Overall, since 2017, the proportion of total credit that is six months overdue to total credit payable has been declining. However, considering that 121 credit card non-performing loan securitization products have been issued in the inter-bank market since 2017, and a total of 359.02 billion yuan of credit card non-performing loans have been disposed of, this ratio may underestimate the level of credit card overdues. Among them, from January to September 2020 and January to September 2021, 60.001 billion yuan and 77.116 billion yuan of credit card non-performing loans were disposed of through the issuance of credit card non-performing loan securitization products respectively. If these non-performing loans are restored, by the end of September 2021, the proportion of the total amount of credit card overdue for half a year to the total amount of credit card payable will be basically the same as the same period last year.
In terms of policy, with the increasing emphasis on the protection of personal information and consumer rights and interests, regulatory authorities have continuously introduced corresponding policies and norms in terms of protecting personal information and financial consumer rights and promoting compliance management. document.
In terms of protecting personal information and the rights and interests of financial consumers, in August 2021, the Standing Committee of the National People's Congress passed the "Personal Information Protection Law of the People's Republic of China", clarifying: the processing of sensitive personal information such as financial accounts , individual consent should be obtained, individuals have the right to withdraw their consent, and personal information processors should provide convenient ways to withdraw consent. In September 2021, the People's Bank of China issued the "Credit Information Business Management Measures" to clarify the definition of credit information and the boundaries of credit information management; clearly stipulate all aspects of the credit information business; emphasize the security of credit information and cross-border compliance in accordance with laws and regulations. use in the environment; improve the transparency of credit reporting business.
In terms of promoting compliance operations, as the overall economy stabilizes and improves, bank credit card business has also experienced restorative growth, and regulatory authorities have issued a number of policies to further standardize credit card operations. At the same time, in response to the rapid development of Internet consumer finance in recent years, regulatory authorities have also formed more systematic and comprehensive regulatory requirements in the field of Internet loans.
Specifically:
Regulating credit card operations
In January 2021, the People's Bank of China issued the "Notice on Promoting the Market-Based Reform of Credit Card Overdraft Interest Rates". It was decided that “the interest rate of credit card overdrafts shall be determined independently by the card issuer and the cardholder through independent negotiation, and the management of the upper and lower limits of credit card overdraft interest rates shall be cancelled.”
Card issuers should fully disclose credit card overdraft interest rates and update them in a timely manner, and should prominently indicate credit card overdraft interest rates and interest calculation methods in credit card agreements; in October 2021, the China Banking and Insurance Regulatory Commission issued "About Serving Normal Production and Commodity Markets in the Coal and Power Industry" "Notice on Matters Relevant to Orderly Circulation to Ensure Smooth Operation of the Economy", which requires standardizing credit card business operations and installment management, and regulating cooperation between banking institutions and non-bank financial institutions such as consumer finance companies; in November 2021, the Banking Association issued "Credit Card Collection" Work Guidelines (Trial)", which have further clarified and adjusted aspects such as collection behavior, collection behavior standards, management of external collection agencies, internal control management, promotion of healthy development of the industry, and self-discipline and punishment; in December 2021, the China Banking and Insurance Regulatory Commission issued the " Notice on Further Promoting the Standardized and Healthy Development of Credit Card Business (Draft for Solicitation of Comments)", which includes strengthening the operation and management of credit card business, strictly regulating card issuance and marketing behaviors, strict credit management and risk management and control, strictly controlling the flow of funds, and comprehensively strengthening the standardized management of credit card installment business , Strictly manage cooperative institutions, strengthen the protection of consumers' legitimate rights and interests, strengthen the supervision and management of credit card business, etc.
Internet loan management
In February 2021, the China Banking and Insurance Regulatory Commission issued the "About Further Standardizing Business." Notice on Bank Internet Loan Business" further strengthens independent risk control requirements, urges commercial banks to implement risk control main responsibilities, independently complete risk control links that have an important impact on loan risk assessment and risk control, and imposes strict requirements on commercial banks and cooperative institutions** * The capital contribution ratio, concentration, and cross-regional business development of loans with the same capital will be detailed and proposed to guide commercial banks to further standardize Internet lending behaviors and promote healthy business development; in March 2021, five ministries and commissions including the China Banking and Insurance Regulatory Commission jointly The "Notice on Further Standardizing the Supervision and Management of Internet Consumption Loans for College Students" was issued. The notice regulates the marketing behavior of lending institutions and their outsourcing partners, strengthens the risk management of Internet consumer loans for college students in banking financial institutions, standardizes collection behaviors, and strengthens personal information Protection, and at the same time deploy the supervision, inspection, investigation and rectification work on the Internet consumer loan business of college students; in November 2021, the China Banking and Insurance Regulatory Commission issued the "Guiding Opinions on Regulating the Management of Price Adjustments in the Banking Service Market", requiring banks to "understand the requirements of Internet platforms and other cooperative institutions to Regarding the service content and price standards provided by customers, the cooperation agreement stipulates the service price information disclosure requirements, three-party dispute resolution responsibilities and obligations, etc., and prohibits cooperative institutions from charging any fees from customers in the name of the bank. It is necessary to continuously evaluate the cooperation model and promptly terminate cooperation with institutions whose service charges are inconsistent with the quality and price."
Table 1: Main policies for my country's consumer finance industry in 2021
Overall, in 2021 , residents’ consumer credit demand has shown a gradual recovery trend as the domestic economy recovers. However, affected by factors such as the recurrence of epidemics in some areas and increasing macroeconomic downward pressure, residents’ consumer confidence has declined, and the growth rate of consumer credit has not yet returned to pre-epidemic levels. Residential leverage ratios continue to be high, and the credit performance of consumer credit may continue to be under pressure. In terms of policy, the regulatory content of the consumer finance industry has become more detailed, and supervision has been strengthened to guide the industry to develop more standardized and healthy.
In 2021, the issuance scale of personal consumption loan securitization products in the inter-bank market has rebounded, and the number of originators has also increased compared with the previous year. In terms of the number of issuances, consumer finance companies still surpass commercial banks to occupy the largest share of originators.
As the epidemic prevention and control enters the normalization stage, my country’s economy continues to recover, and residents’ consumer credit demand gradually rebounds. Against this background, the issuance scale of personal consumption loan asset-backed securities in the inter-bank market is relatively large. There was a rebound in the previous year. In 2021, 16 personal consumer loan ABS products were issued in the inter-bank market, with an issuance scale of 47.188 billion yuan, an increase of 25.03% from 2020.
From the perspective of basic asset types, personal consumption loan ABS products can be divided into general consumer loan ABS products and credit card installment ABS products. In 2021, 13 general consumer loan ABS products will be issued, with a total issuance scale of 243.68 billion, an increase of 32.69% compared with 2020; 3 credit card installment ABS products were issued, with a total issuance scale of 22.820 billion yuan, an increase of 17.77% compared with 2020.
From the perspective of originators, there are 10 originators of personal consumer loan ABS products in 2021, including 5 commercial banks (respectively China Merchants Bank, Ping An Bank, Bank of Hangzhou, Bank of Ningbo and Bank of Communications), an increase of 3 from the previous year, with a total of 6 issuances, with a total issuance scale of 33.835 billion yuan, accounting for 71.70%; 5 consumer finance companies (including Home Credit Consumer Finance, Industrial Consumer Finance, China Post Consumer Finance, Hangyin Consumer Finance and Hubei Consumer Finance), one more than the previous year, initiated a total of 10 orders, with a total issuance scale of 13.353 billion yuan, accounting for 28.30%. Among the above-mentioned consumer finance companies, Hangyin Consumer Finance and China Post Consumer Finance launched personal consumer loan ABS products for the first time.
In 2021, three consumer finance companies were approved by the China Banking and Insurance Regulatory Commission to be established, namely Suyinkaiji Consumer Finance, Chongqing Ant Consumer Finance and Sichuan Vipshop Fubon Consumer Finance. Among them, Suyin Kaiji Consumer Finance was jointly established by four shareholders: Bank of Jiangsu, Taiwan Kaiji Commercial Bank, Heilan Home and Five Star Holdings, with a registered capital of 2.60 billion yuan, and the capital contribution ratios of each shareholder were 54.25%, 36.17%, and 7.5% respectively. and 2.08%, is an Internet consumer finance company that does not set up offline business outlets and uses technology to drive the entire process of online loans. Chongqing Ant Consumer Finance has a registered capital of 8.00 billion yuan. The top three shareholders are Ant Technology Group Co., Ltd., Nanyang Commercial Bank Co., Ltd. and Cathay Bank (China) Co., Ltd., with shareholding ratios of 50.00%, 15.01% and 10.00 respectively. %. Sichuan Vipshop Fubon Consumer Finance was jointly established by Vipshop (China) Co., Ltd., Xtep (China) Co., Ltd. and Fubon Huayi Bank Co., Ltd. ***, with a registered capital of 500 million yuan, and the shareholding ratios of each shareholder are respectively are 49.90%, 25.10% and 25.00%. As of the end of 2021, among the 30 licensed consumer finance companies approved by the China Banking and Insurance Regulatory Commission, 15 consumer finance companies have received approval to carry out asset securitization business, and 9 of them have successfully initiated personal consumption loans in the inter-bank market ABS products include Industrial Consumer Finance, Suning Consumer Finance, Jincheng Consumer Finance, Bank of China Consumer Finance, Home Credit Consumer Finance, Immediate Consumer Finance, Hubei Consumer Finance, China Post Consumer Finance and Hangzhou Bank Consumer Finance. As more and more consumer finance companies have been established for three years or more and meet the regulatory requirements for applying for asset securitization business, more consumer finance companies will participate in the asset securitization market in the future.
From the perspective of issuance interest rates, the issuance interest rate range of priority (AAAsf) securities is 2.66~6.00%, and the issuance interest rate range of sub-priority (AA sf/AAsf) securities is 2.73~6.50%. Compared with 2020 The interest rates for issuing securities of the same level (the interest rate ranges are 3.45~4.67% and 3.70~5.18% respectively) have expanded compared to the range. Compared with the one-year China Bond short-term and short-term bill maturity yield, the interest spread range of AAAsf grade for personal consumer loan ABS products initiated by commercial banks is -43.22~21.95BP; for consumer finance companies, the interest spread range of AAAsf grade is -21.74~ 239.06BP.
The issuance interest rates of personal consumption loan ABS products initiated by consumer finance companies are generally higher than those of products initiated by commercial banks.
There are also large differences in the issuance interest rates between different consumer finance companies. Taking senior securities as an example, the issuance interest rate of AAAsf-rated securities for personal consumer loan ABS products initiated by Home Credit Consumer Finance is significantly higher than that of other originators, while the bank consumer finance The company's China Post Consumer Finance, Hangyin Consumer Finance and Industrial Consumer Finance have relatively low issuance rates for securities of the same level.
From the perspective of transaction volume, in 2021, the transaction amount of personal consumer loan ABS products was 14.863 billion yuan, an increase of 9.84% compared with the whole year of 2020; the number of transactions was 107, and the average transaction amount was 139 million yuan. . In 2021, the transaction amount of credit ABS products in the inter-bank market totaled 747.033 billion yuan, and the transaction amount of personal consumption loan ABS products accounted for only 1.99%. The activity of secondary transactions needs to be improved.
The pooled assets of personal consumption loan ABS products have the characteristics of small single-user amounts, extremely high dispersion, and short remaining terms. Due to the different characteristics of consumer credit products of different originators, different personal consumption loans There are differences in asset pool characteristics among ABS products, but the contract interest rates/handling rates of the assets in the pool remain at a relatively high level
The basic assets of personal consumption loan ABS products are mostly unsecured or guaranteed. Credit loans have small amounts per household, high homogeneity, and extremely high asset dispersion. The underlying assets of personal consumer loan ABS products issued in 2021 mainly have the following characteristics:
The average outstanding principal balance of single-family loans is small and the asset pool is highly dispersed. The average number of loan households in the personal consumption loan ABS products issued in 2021 is 185,426.75 households, and the average outstanding principal balance of single-household loans is 78,700 yuan. The dispersion of the asset pool has decreased slightly compared with the previous year. The average outstanding principal balance of single-user loans for products initiated by commercial banks is smaller than that of consumer finance companies. The main reason is that the basic assets of products initiated by commercial banks include credit card installment loans, with smaller single-user credit lines and shorter remaining terms. For credit card installment loan ABS products issued in 2021, the average outstanding principal balance of single-family loans in the pool is between 08,800 and 11,900 yuan, and the asset pool is extremely dispersed.
The contract interest rate/handling fee rate of assets in the pool continues to remain at a high level. The average weighted average contract interest rate of the assets in the pool for personal consumption loan ABS products issued in 2021 is 15.19%, which continues to remain at a high level. By type of initiating institution, the weighted average contract interest rate on the underlying assets of products initiated by commercial banks is mostly between 6 and 17%, while the weighted average contract interest rate on the underlying assets of products initiated by consumer finance companies is between 11 and 24%, which is higher than that of banks. products. This is mainly due to the fact that consumer finance companies have weaker customer qualifications than banks and have higher risks, so they need to charge higher interest rates. In addition, since the principal and interest repayment method of consumer loans mostly adopts equal principal and equal interest, that is, the interest calculation method is full interest, the internal rate of return of the asset pool's cash flow is related to the age of the asset pool, that is, the longer the age of the asset pool, the higher the internal rate of return. The higher the yield. Overall, the interest rates of pooled assets for personal consumption loan ABS products continue to remain at a high level, bringing higher excess interest spreads to ABS products and providing certain credit support.
The weighted average remaining period of the underlying assets has not changed much compared with previous products, but there are some differences between products. The average weighted average remaining term of the underlying assets of personal consumer loan ABS products issued in 2021 is 15.94 months, which is basically the same as in 2020. In terms of commercial banks, the average weighted average remaining period of the asset pool in 2021 is 11.73 months, an increase of 1.79 months compared with 2020. This is mainly due to the fact that the assets in the pool of Anshun 2021-1 are car owner loans 2 and the remaining period is longer (up to 26.65 months). . For consumer finance companies, the average weighted average remaining term of the asset pool in 2021 is 18.46 months, 0.96 months shorter than in 2020. Products originated by consumer finance companies have underlying assets with longer remaining maturities or are related to their loan purposes. For example, the pooled loans of Xingqing 2021-2 and Xingqing 2021-3 are mainly used for large-scale consumption such as decoration, and have the characteristics of large single amount and long term.
The cumulative default rate of personal consumption loan ABS products issued in 2021 shows a slight upward trend compared with 2020. The cumulative default rate of personal consumption loan ABS products initiated by consumer finance companies is higher than that of products initiated by commercial banks. Affected by the recurrence of epidemics in some regions and the slowdown in macroeconomic growth, the repayment ability of borrowers in some regions or industries has declined, and the credit performance of consumer loan assets continues to be under pressure
The cumulative default rate is 3
Currently, the cumulative default rate for personal consumer loan ABS products in the interbank market is generally defined as the amount of loans overdue for more than 90 days/the initial size of the asset pool. Compared with other personal consumption credit assets (such as personal housing loans and personal car loans), personal consumption loans are mostly unsecured or guaranteed credit loans and are relatively affected by the economic cycle. Judging from the performance of personal consumer loan ABS products issued in the inter-bank market from 2017 to 2021 as of the end of 2021, its cumulative default rate has shown a trend of increasing year by year.
Looking at the type of originator, the cumulative default rate of ABS products initiated by commercial banks is lower than that of ABS products initiated by consumer finance companies. This is mainly due to the fact that commercial banks have a large retail customer base, mature risk control systems, and low capital costs. The quality of customers acquired by commercial banks is relatively better. However, we have also noticed that the cumulative default rate of ABS products initiated by both commercial banks and consumer finance companies has shown an increasing trend year by year, which may be related to the rapid expansion of consumer credit in recent years and the sinking of the customer base served by the consumer finance industry. Due to the recurrence of epidemics in some areas and the downward pressure on the macro economy, the credit performance of personal consumption loan assets may continue to be under pressure.
In 2021, 16 individual consumer loan ABS products were issued in the inter-bank market. As of the end of 2021, the cumulative default rate was between 0.00% and 5.50%. Among the products launched by consumer finance companies, the cumulative default rate of the "Jiying" series is generally higher, ranging from 2.48% to 5.50%, but it is lower than the "Jiying" series issued in 2020; Chuying 2021-1 and Chuying 2021-2 lasted for 2 and 3 periods respectively, with cumulative default rates of 1.04% and 0.51% respectively. Since the product is distributed on a quarterly basis (3 periods are 9 months), the default performance is reasonable; at the same time, the 2021 new China Post Consumer Finance and Hangyin Consumer Finance, two consumer finance companies that have participated in product launches, have launched Postwin 2021-1 and Hangbang 2021-1. Due to their short duration, default performance has not yet been observed. Most of the products launched by commercial banks have short durations and no default performance has been observed. Anshun 2021-1, initiated by Ping An Bank, has lasted for 4 periods and has a cumulative default rate of 0.90%. It is at a relatively high level among commercial banks, which may be related to its asset characteristics and corresponding customer groups. The assets in the Anshun 2021-1 pool are car owner loans, which are cash loans using cars as collateral for personal consumption or business. The weighted average interest rate of the loans in the pool is 16.79%, which is at a relatively high level.
Overdue rate
With the normalization of epidemic prevention and control and the full resumption of work and production, the impact of the epidemic on residents’ income and daily consumption has gradually weakened. Personal consumption loan ABS issued in 2021 The overdue performance of the underlying assets of the product improved significantly. Judging from the performance of existing products, the overdue rates of basic assets of personal consumer loan ABS products ranging from 1 to 30 days, 31 to 60 days, and 61 to 90 days have generally declined compared with 2020. Compared with the same period in the past three years, the short-term overdue rates of 1 to 30 days and 31 to 60 days for the underlying assets of existing products have basically fallen back to pre-epidemic levels. The overdue rate of 61 to 90 days has declined compared with 2020, but is still Higher than the pre-epidemic level, it can be seen that the impact of repeated epidemics in some areas on residents' income and daily consumption has not been completely eliminated. The slowdown in economic growth has had a certain impact on personal solvency, and the migration rate of overdue assets has increased. , which may further push up the cumulative default rate of underlying assets in the future.
Annualized cumulative recovery rate 5
We observed the overall recovery performance during the duration of some of the personal consumer loan ABS products that have been paid out from 2016 to 2021. Initiated by consumer finance companies The average annualized cumulative recovery rate of the products is 12.46%. Among them, Zhongying New Yidai 2016-1 performed relatively well, with an annualized cumulative recovery rate of 31.33%. However, the recovery rates of the other two products in the series were lower. The average annualized cumulative recovery rate of the "Xingqing" series of products is 5.59%, which is at a low level among products launched by consumer finance companies. The average annualized cumulative recovery rate of the "Jieying" series products is 13.18%, of which the average recovery rate of the "Jieying" series products issued in 2020 is 14.04%, which is higher than the recovery rate of the products issued in 2019 (12.32%).
Early repayment rate 6
The weighted average interest rate of the assets in the pool of personal consumption loan ABS products is relatively high, and early repayment may cause excess interest spreads to decrease. In addition to the impact of the borrower's own financial situation, the originator's early repayment policy will have a greater impact on the borrower's willingness to repay early. In the early days, commercial banks had strict requirements for early repayment of credit card installment loans. Early repayment would not only result in a certain percentage of penalty interest, but also the handling fee for the early repayment portion would not be reduced, leaving borrowers with insufficient motivation to repay early. The early repayment policies of consumer finance companies are more flexible, and due to higher loan interest rates, borrowers have more incentive to repay early if their financial ability allows. Starting from the second half of 2021, the early repayment rate of assets in the pool of personal consumer loan ABS products has increased significantly, which may be related to the high interest rates of consumer loans and the central bank's comprehensive reduction in reserve requirements, prompting borrowers to carry out loan replacements.
Conclusion
In 2021, my country's economy will gradually return to normal, and residents' consumer credit demand will gradually rebound. Correspondingly, the issuance scale of personal consumption loan ABS products has stabilized and rebounded. Against the backdrop of the normalization of COVID-19 prevention and control and the full resumption of work and production, the impact of the epidemic on residents' income and daily consumption has gradually weakened, and the overdue performance of the underlying assets of personal consumption loan ABS products has significantly improved. Nonetheless, in the post-epidemic era, the recurrence of epidemics in some areas, the continued high residents' leverage ratio, and the slowdown in economic growth have all had a certain impact on individuals' solvency, and the cumulative default rate of personal consumer loan ABS products has shown an increasing trend year by year. We expect that the performance of personal consumption loan ABS products will be further differentiated in the future, and the performance of ABS products initiated by institutions with high-quality customer groups, core risk control technologies and perfect post-loan management mechanisms will be more stable.
1 For products issued on the same day, the one with the lower issuance interest rate will be selected for analysis.
2 For car owners’ loans for personal consumption and business purposes such as home decoration, travel, study abroad, weddings, medical care, etc., the collateral is the vehicle.
3 Cumulative default rate = cumulative default amount/asset pool balance on the initial calculation date.
4 Cumulative default rate = ∑ Default amount in each period after the issuance of each product/∑ Asset pool balance on the initial calculation date of each product. Only products with a performance period of more than 6 periods (inclusive) are selected to count the cumulative default rate. , this section is the same.
5 Cumulative recovery rate = cumulative recovery amount / cumulative default amount, annualized recovery rate = cumulative recovery rate / number of days in the performance period * 365, where the number of days in the performance period includes the packet period. The trustee reports of some products that have been redeemed did not disclose relevant data, so they were eliminated.
6The statistics of prepayment rates start from the second performance period of each product and have been annualized.
This article is derived from related questions and answers from China Chengxin International: