In the first quarter, the non-performing rate of credit increased, and the upgrading of financial risk control strategy was imminent

Time:2020-8-19

Recently, the CBRC released the banking data for the first quarter of this year, showing that the non-performing rate increased by 0.24 percentage points over the beginning of the year. Credit card loans have declined and the non-performing rate has increased. The CBRC said that it will further strengthen the supervision and guidance, continue to promote the disposal of non-performing loans in the banking industry, and continue to strengthen the handling of non-performing loans.

Bank‘s bad credit rate rose in the first quarter

The banking data released by the CBRC in the first quarter showed that in the first quarter, the economy was greatly affected by the epidemic, the stock of non-performing loans of commercial banks increased significantly, and the non-performing rate rebounded rapidly.

At the end of the first quarter, the non-performing rate increased by 0.52 percentage points compared with the beginning of the year. Among them, loans for personal automobiles and other personal consumption decreased by 27 billion yuan, the non-performing rate at the end of the quarter increased by 0.24 percentage points compared with the beginning of the year, and credit card loans decreased by more than 330 billion yuan. Among them, more than 400 billion yuan was reduced in February and more than 140 billion yuan was added in March.

According to the relevant person in charge of the China Banking and Insurance Regulatory Commission, “the epidemic affected the repayment ability of some credit card customers, and the short term of credit card loans and the rapid non-performing exposure were the main reasons for the rise in the non-performing rate of consumer loans and credit card loans in the first quarter.”. He said that with the gradual improvement of the residents’ ability to return to work, the residents’ ability to return to work will continue to improve in the future.

The hitherto unknown novel coronavirus pneumonia, who is the governor of the people’s Bank of China, also said that the new crown pneumonia epidemic has brought unprecedented impact on China’s economic and social development, and has caused some downward pressure on the quality of bank credit assets. Due to the lag of the risk exposure of non-performing loans and the policy of delaying repayment of principal and interest of enterprises since the outbreak of the epidemic, banks may face greater non-performing rate increase, non-performing assets increase and disposal pressure.

Risk control strategy upgrade is imminent

The increase of non-performing credit rate exposes the problems of asset data management, and at the same time, banks are urgently required to improve risk control strategies.

After several years of rapid growth in domestic retail credit market, the product homogeneity is serious, the growth rate of asset volume, scene penetration rate, customer group coverage and other aspects generally slows down, and the market competition is fierce. Taking credit card as an example, according to the performance annual reports of several listed banks in 2019, the growth rate of credit card issuing volume slowed down year on year. In particular, under the impact of the epidemic, consumer demand has dropped sharply, and the amount and frequency of card transactions are showing a sharp decline.

In addition, due to the limited development time of consumer credit business of many financial institutions, they have not experienced the test of complete economic cycle, and the accumulated data dimension is not comprehensive enough. The coverage of historical data used to build the existing risk control strategy and model system is not wide enough and the cycle is not long enough, so it can not accurately deal with the impact of emergencies.

Under the influence of this epidemic, the external environment and its own factors of users’ repayment decision-making have changed dramatically in a short time, and the law of historical model abstraction and fitting is no longer applicable. Financial institutions need the structural characteristics of their assets and customers, prudently evaluate the effectiveness of the existing risk control system and quickly adjust the risk control means according to their own business performance under the impact of the epidemic.

Digital boost bank quality and efficiency

More than 800 bank outlets have closed this year, compared with 836 in the past 2019. Although the closure of physical outlets, off the counter business rate is higher, the first quarter financial report of listed banks is still beautiful. On the one hand, during the epidemic period, bank employees’ home office outlets were suspended, and travel expenses and some marketing expenses were decreasing; on the other hand, banks actively used Internet, big data, artificial intelligence and other technologies to provide contactless credit and diversified development during the epidemic period.

Bank digitalization relies on big data and models for risk assessment, online automatic operation of the whole process, no manual or little manual intervention, and rapid approval of lending. It has played an active role in improving loan efficiency, innovating risk assessment means, and broadening the coverage of financial customers.

Digitalization is not only to implement online transformation of original products, services, process systems and management norms, to achieve efficient customer service in the Internet environment, but also to achieve cross channel, cross department, cross system continuity and sustainable customer management, improve customer experience and stickiness, and release the capacity of customer operation. At the same time, we should promote the automation, real-time and intelligent of the bank’s service mode and service content, and improve the integration and humanization of products and services. The retail business of the times should include the construction of professional Internet business model, the creation of multi-channel integration and differentiation business model, and the construction of online and offline digital collaborative operation mode.