Under the guidance of the regulatory guidance and corresponding policies, the state-owned largebankMany small micro loans have been lowered since 2018interest rateRecently, more benchmark loans have been issued.interest rate. In addition, the Bank also leaned toward small and micro businesses in terms of performance evaluation and cost pricing.
According to industry insiders, the big banks continue to increase their prices and stir up the competition pattern of local small and micro businesses. On the one hand, the price war has gradually spread, and a number of joint-stock banks and city commercial banks have lowered their micro-interest rates to dilute their profit margins. On the other hand, the big banks have the highest overlap with the customers of the first echelon stocks, and the two sides compete in high-quality customers. The most fierce, especially the mortgage customers with real estate as collateral, the phenomenon of large-scale interception is obvious.
In the face of big competition, banks have started a "counterattack." First, through misplaced competition, we will tap high-quality customers from customers who have been “filtered out” by big banks, aim at technology-based enterprises, and use the “guarantee + government discount” model to issue loans; second, make full use of technological advantages to strengthenCreditRisk management, reduce the dependence on offline assessment by optimizing service channels and product processes, reduce the burden of financing expenses for small and micro enterprises and better control risk pricing.
The big line set off the interest rate war
“The original large state-owned banks did not pay much attention to small and micro-loan business, but since the second half of 2018, various banks have concentrated on small and micro-domains, and the performance of the big banks has been particularly evident.” General Manager of a small-scale joint-stock Shenzhen Small Micro Mo Yizhen (pseudonym) told the China Securities Journal reporter.
Due to the low cost of capital, interest rates have become the biggest "tool" for the big banks in the small and micro fields. Under the guidance of regulatory policies, many large banks have repeatedly lowered the interest rate on small and micro loans since 2018. For example, since the establishment of the Bank in July 2018, the price reduction in the field of small and micro enterprises has been carried out in three rounds. The price reduction is not only for the new small and micro enterprise customers, but also for small and micro enterprises. The interest rate has dropped by as much as 178 basis points.
A relevant person in charge of a large bank in South China told the China Securities Journal that the current supervision of large banks and small interest rates is mainly focused on loans with a single-person credit of less than 10 million yuan. The bank has already lowered the interest rate of this part of the loan. Control is about 10% above the benchmark interest rate.
Another person in charge of the Pratt & Whitney Amount Department told the China Securities Journal that the bank’s own micro-loan interest rate was relatively low. After several price cuts, the one-year loan interest rate is now about 10% above the benchmark interest rate. In the meantime, the interest rate level above one year is relatively high.
The price war that has started in the big line has gradually spread, and a number of joint-stock banks and city commercial banks have begun to cut interest rate pricing.
A local private bank in Shenzhen revealed that the bank took the initiative to reduce the interest rate of small and micro enterprises on loan in the second quarter of 2018. In the third quarter, the new small and micro enterprise loans have dropped by nearly 2 percentage points from the first quarter. In the fourth quarter, the interest rate of new micro-enterprise loans in the fourth quarter decreased by 3.05 percentage points from the first quarter of 2018.
A local shareholding bank in Shenzhen also told China Securities Journal that since 2018, the interest rate of small and micro loans has been steadily declining. As of the end of November 2018, the interest rate of annual lending loans decreased by 1.75 percentage points from the beginning of the year.
A person in charge of a joint-stock bank SME explained the reasons for the interest rate cut. First, the cost of capital was gradually reduced, which led to the downward adjustment of interest rates. Second, the pressure on the bank to reduce interest rates was increasing, which led other banks to follow suit. It is in response to the call for supervision to solve the problem of difficult financing and expensive financing for private enterprises.
While the interest rate is lowered to give benefits to small and micro enterprises, it also brings greater operational pressure to banks.
"The price of the big bank was originally low, and the interest rate was limited. It is very painful now. The head office gave us the goal of ensuring a meager profit. The single-funded loan with a credit amount of less than 10 million yuan is the focus of this interest rate reduction. The big bank is doing the loss at a loss." The person in charge of the relevant department of the above-mentioned big bank told the China Securities Journal reporter.
Due to the relatively high cost of debt, the pressure faced by small and medium banks in the price war is more obvious. "Compared with the big banks, the pressure is now greater on joint-stock banks and small banks. When the interest rate of big banks is reduced to 4% or 5%, it is difficult for these banks to enter the market and find customers if they do not cut prices." Banking veterans point out that market space and profit margins will become thinner and thinner, and they will have a greater impact on them.
The "first echelon" is under pressure
In addition to the interest rate advantage, the Bank also improved the enthusiasm of small and micro-distribution of branches by improving the weight of small and micro assessments and reducing the cost of capital.
The relevant person in charge of the ICBC Shenzhen Branch Pratt & Whitney Amount Division told the China Securities Journal that ICBC has 13 branches in Shenzhen to serve small and micro enterprises. Among them, 4 branch activities are small and micro business centers, which are responsible for small and micro businesses in key areas of Shenzhen; 9 sub-branches focus on the promotion of key small and micro products. Different from other sub-branches, the innovative small- and micro-loan products promoted and sold by these 13 sub-branches have been specially authorized, and performance appraisal will also be tilted towards small and micro-business.
“The head office also makes differential pricing for small and micro enterprise loans. The cost of each of our sub-branches is independent. Now the head office provides capital and internal fund transfer allocation for small and micro enterprises, and the prices are discounted, which is conducive to improving branch operations. Xiaowei’s income.” The person in charge pointed out.
The big bank continues to increase the number of codes, which is also stirring the local small and micro business competition. Due to different capital costs, risk preferences, and different customer platforms, the bank's small and micro business customer base is stratified. The first echelon bank is mainly a stock company that deeply cultivates small and micro businesses. The customers are of high quality and the loan interest rate is relatively low. The second and third echelons include small and medium-sized banks and city commercial banks. The customer threshold is lower and the interest rate is correspondingly higher.
At present, the Bank has the highest degree of overlap with the first echelon bank customers, and the two sides are the most fierce in the competition for quality customers. Especially for mortgage customers who use real estate as collateral, the phenomenon of large-scale interception is obvious. Because of the pledge of collateral and high customer qualifications, this part of the customer has always been the target group of the first echelon bank.
Mo Yiyi said: "The big bank has occupied a very high market share of mortgages. In the past, many mortgage customer loan needs were transferred to other banks. After the small force, the big bank intercepted these customers and stayed in their own systems. ”
In addition to the advantages of innate channels, the attraction of low interest rates has also caused many customers to flow into the big banks. Interest rates have been lowered again and again, and there is a clear gap between interest banks and city banks in interest rate pricing. The person in charge told the China Securities Journal that the minimum loan interest rate of the big bank can achieve the benchmark interest rate, which is 40%-50% lower than other banks, and the interest rate difference between some small banks is even more than double.
“In the past, there was information asymmetry in the small and micro market, and customers were not sensitive to market prices and information. Now, the industry is spreading the publicity and breaking the original information asymmetry. Under the strong propaganda, the big bank has low interest rate advantage. Has attracted a lot of customers." Mo Yi added.
In contrast, the backward pressure on the echelon banks is relatively small. “The big price cuts will bring some pressure, but the overall pressure is not big. First, the small and micro market has a lot of space. Second, the target customer groups of us and the big bank are quite different, and the customer overlap is low.” The head of a small-scale joint-stock SME told the China Securities Journal.
The head of a branch of another city commercial bank also expressed a similar view to the China Securities Journal reporter: the threshold for customers of the big bank is relatively high. Many customers have no loans at all because of the lack of collateral and low profit levels. This part of the customer is the main customer base of small banks, and low interest rates will not cause a significant loss of this part of the source.
"Everyone is also waiting to see, the big line of efforts to small micro-business is a phased response policy, or as a long-term sustainable strategy, which will affect the future competitive landscape of small and micro business." Mo Yizhen pointed out.
The relevant person in charge of the above-mentioned ICBC Shenzhen Branch Pratt & Whitney Amount Division told the China Securities Journal that the bank has been working on small and micro businesses, and this year's growth rate is more obvious. There are several reasons for this: First, the national level has continuously emphasized the development of inclusive finance, large commercial banks have actively developed small and micro businesses due to their responsibility; second, the regulatory authorities have introduced a number of measures, such as targeted RRR reduction and macro-prudential evaluation system. The hooks, the small micro loans issued to banks are exempted from VAT, etc., and many practical incentives are given to commercial banks that actively develop inclusive finance. Third, from the perspective of bank operations, small and micro enterprises have higher growth value, which is the bank. The important growth point of long-term stable operation; Fourth, the natural outbreak brought by the accumulation of Internet technology to a certain extent, the data accumulation of the commercial bank in the early stage, the wind control model is maturing, and entering the harvest period, providing strong support for the rapid growth of small and micro businesses.
“Policy guidance is a driving factor. From a long-term perspective, we will operate small and micro businesses as a key segment,” she added.
Kong Xiang, head of Xingye Research Financial Industry Research, believes that small and micro enterprises do not have sufficient collateral, and the credit risk is higher than that of ordinary enterprises. Although low interest rates are for the benefit of small and micro enterprises, they must also consider the bank's risk requirements. Under the current economic background. It is also difficult for banks to do a lot of small and micro at the same time giving low interest rates. He said: "The small micro-loan products that Daxing is now doing near the benchmark interest rate are generally short-lived and have high-quality asset mortgages. Small and medium-sized banks can introduce products based on business flow, taxation and other products for small and micro enterprises through differentiated competition. This is a necessary supplement to the inclusive financial business."
The China Securities Journal reporter learned that many small and medium-sized banks are strengthening misplaced competition and mining quality customers from the customers filtered by the bank. “The threshold for large-scale customers is relatively high, especially for credit-based loans. It is difficult for low-profit small enterprises to enter their loan list. The customers who have been screened out by the big banks have high-quality enterprises with development potential, and the small bank loan mechanism and customer operations are more flexible. Can effectively serve this part of the customer." The above-mentioned city bank branch president pointed out.
She said that in order to support the financing of science and technology enterprises, local governments have introduced corresponding support policies, and interest subsidies are an important means. By virtue of the favorable policies, small and medium-sized banks use technology-based enterprises as an important customer group and use the “guarantee + government discount” model to issue loans.
"In terms of specific operations, we are working with guarantee companies to issue credit loans for technology-based small and micro enterprises with unsecured assets and insufficient credit information. The minimum annualized interest rate is around 7%, and the local government gives a discount rate of about 50%. 70%, plus the guarantee fee, the minimum financing cost can be 4%. Our small and micro enterprises that meet the interest rate standard account for more than 80%," she said.
Ping An BankThe relevant person in charge of the Pratt & Whitney Financial Division believes that small and micro enterprises have a large scale and vary greatly in terms of region, industry, scale, and demand. Therefore, the microfinance market is composed of multiple entities. Fully competitive long tail market. Each bank will provide one or more financial services for a specific customer base based on its own characteristics. Microfinance will present a complex, diverse and organic competitive ecosystem in the future.
He pointed out that banks have always had several concerns about small and micro loans. First, small and micro enterprises have limited information displayed in public channels, financial management norms are insufficient, and there are information blind spots; second, small and micro enterprises have short survival periods, low survival rates, frequent industry changes; third, small micro enterprises have low loan quotas. The frequency is high and the industry is highly fragmented. It does not match the bank's own management system, institutional structure and past experience and characteristics of serving large enterprises. Fourth, the guarantees that small and micro enterprises can provide are relatively poor. China's economy is in an adjustment period. The biggest difficulty for banks to develop small and micro is that their financing model and financing requirements are difficult to match with small and micro enterprises. The bank is most worried about the sudden break of the capital chain of small and micro enterprises and the inability to repay bank loans.
“The economic stepping into the adjustment period will generally lead banks to increase internal risk pricing. The current regulation requires financial services to the real economy, increase credit to small and micro enterprises, and reduce loan pricing. This is a major test for the ability of commercial banks to manage risks. "He stressed.
"Compared with the big bank, although we have disadvantages in terms of capital cost, we can make full use of the advantages of science and technology and open up information channels. At present, Ping An Bank has built a set of services in combination with big data, Internet, cloud computing, artificial intelligence and other technologies. SMEs data credit financial service system, while accelerating the establishment of new online and offline comprehensive service channels, intelligent approval process, differentiated post-lending management and other new service mechanisms, reduce the dependence on external offline assessment by optimizing service channels and product processes, and reduce Small and micro enterprises have a financing cost burden and better control risk pricing," he pointed out.
(Article source: China Securities Journal)