Since the fourth quarter of last year, regulatory authorities have continued to regulate the behavior of commercial banks in absorbing deposits through Internet third-party platforms and off-site. For small and medium-sized banks, especially non-Internet private banks, if they want to continue to achieve rapid growth in deposits, they must strengthen the construction of self-operated platforms.
A reporter from the 21st Century Business Herald combed through the data of 17 private banks that have released financial reports (one has not released, and one has been in business for a short time) and found that the growth of bank deposits in 2020 has shown great differentiation: first, the growth rate of deposits of 17 banks has diverged; second, the gap between banks that opened in the same batch is widening; third, the gap between Internet-type banks and non-Internet-type banks is also widening.
On January 15 this year, the Central Bank and the China Banking and Insurance Regulatory Commission officially jointly issued the "Notice on Matters Related to Regulating the Personal Deposit Business of Commercial Banks through the Internet", which regulates the personal deposit business of commercial banks through the Internet and requires local corporate banks to serve customers in the areas where they have established institutions. In 2021, the deposit gap between private banks is expected to further widen.
Two negative growth
In terms of deposit balance, as of the end of 2020, WeBank ranked first with a deposit balance of 262.829 billion yuan; MYBank ranked second with 164.689 billion yuan, nearly 100 billion yuan less than WeBank; Suning Bank ranked third with 57.294 billion yuan; followed by 8 banks with balances of more than 20 billion yuan.
Comparing the deposit growth rates of 17 private banks in 2020, it was found that Xinwang Bank and Jincheng Bank's deposit growth rates were negative, -20.56% and -17.36% respectively; 5 banks' deposit growth exceeded 100% , respectively, MYBank, Zhongguancun (000931, Stock Bar) Bank, Huatong Bank, Xin'an Bank, and Yumin Bank; Zhongbang Bank and China Commercial Bank's deposit growth exceeded 50%, and the remaining eight grew below 50%.
For Xinwang Bank and Jincheng Bank, the deposit growth rate of the two banks has been a "roller coaster" in the past two years: in 2019, Xinwang Bank's deposit growth rate was 95.95%, and Jincheng Bank's deposit growth rate was also as high as 92.12%.
Xinwang Bank stated in its 2020 financial report that it expects the policy trend of strong financial supervision to continue in 2021, and that the bank's Internet deposit and Internet loan businesses are generally relatively standardized; Jincheng Bank stated that the bank actively consolidates the development foundation of deposit business, enriches funding source channels, and provides guarantee for asset business and liquidity risk management.
The deposit growth rates of Fumin Bank and Sanxiang Bank were 1.25% and 0.69% respectively. Although they achieved growth, the growth rate was far lower than that of other banks with deposit growth. As far as Sanxiang Bank is concerned, the bank's personal deposits and corporate deposits grew at 18.17% and 5.41% respectively in 2020, but interbank deposits fell by 59.43%. As of the end of 2020, the bank's interbank deposit balance was 2.557 billion yuan, accounting for 5.87% of all deposits. At the same time, the bank reduced the balance of structural deposits to 0 yuan. The bank said the structural adjustment had achieved remarkable results.
Among the five banks with a growth rate of more than 100%, MYbank, Zhongguancun Bank, Huatong Bank, and Xin'an Bank also saw rapid growth in deposits in 2019. Among them, Zhongguancun Bank, Huatong Bank, and Xin'an Bank have been open for a relatively short time; while Yumin Bank opened in September 2019, and last year was its first full fiscal year.
Three kinds of differentiation
In addition to the differences in the deposit growth rates of the 17 private banks mentioned above, there are two other differences: first, the gap between banks that opened in the same batch is widening; second, the gap between Internet banks and non-Internet banks is also widening.
Take the first five banks that opened for business as an example: the deposit balances of WeBank and MYBank were 262.829 billion yuan and 164.689 billion respectively, while the deposit balances of Huarui Bank, Jincheng Bank, and China Commercial Bank were 27.435 billion yuan, 19.486 billion yuan, and 13.746 billion yuan respectively. The gap between the highest and the lowest was close to 20 times, and the deposit growth rates of WeBank and MYbank still maintained rapid growth.
Among the second batch of private banks that opened, Suning Bank, Zhongbang Bank, Sanxiang Bank, Yilian Bank, Fumin Bank, and Blue Ocean Bank have surpassed Huarui Bank, Jincheng Bank, and China Commercial Bank that opened in the first batch.
At the same time, among the second batch of private banks that opened, Suning Bank, Zhongbang Bank, and Yilian Bank also surpassed Fumin Bank and Xinwang Bank, which opened relatively early.
For Internet-type banks, the gap between WeBank, MYBank, XinwangBank and Yilian Bank is also widening. WeBank’s deposit scale is nearly 100 billion yuan higher than that of MYBank; Xinwang Bank’s deposits are nearly 10 billion yuan higher than that of Yilian Bank, which opened later.
3 companies’ deposits account for less than 60% of liabilities
Judging from the ratio of deposits to liabilities, most of the 17 banks are between 70% and 90%, with Jincheng Bank the highest at 88.08%; however, there are also three banks with less than 60%, namely MYBank, Fumin Bank, and Xinwang Bank, all of which are Internet-type banks.
According to regulatory requirements, the interbank liabilities of commercial banks cannot exceed 1/3. What is the interbank liabilities of the above three banks?
MYbank's financial report shows that as of the end of 2020, its deposits and deposits from peers and other financial institutions were 101.117 billion yuan, accounting for 34.02% of total liabilities. At the same time, its balance of borrowed funds was 4.605 billion yuan, and the total proportion exceeded 1/3.
Fumin Bank's financial report shows that as of the end of 2020, deposits and deposits from its peers and other financial institutions, funds borrowed from banks, and financial assets sold and repurchased totaled 9.474 billion yuan, accounting for 19.08% of the liability ratio, less than 1/3.
Xinwang Bank disclosed that as of the end of 2020, its interbank liabilities were 12.503 billion yuan. Calculation shows that its interbank liabilities accounted for more than 1/3, at 35.17%.
The loan-to-deposit ratio of three companies is higher than 100%
From the perspective of deposit ratio, 3 of the 17 banks are higher than 100%, namely Yilian Bank, Fumin Bank, and Xinwang Bank. They are also Internet-type banks. Among them, Xinwang Bank is as high as 144.81%; while Merchant Bank is only 53.13%.
As early as 2015, the Commercial Bank Law was revised, canceling the requirement that the loan-to-deposit ratio should not be higher than 75%, but at the same time changing the loan-to-deposit ratio from a statutory regulatory indicator to a liquidity monitoring indicator.
In fact, when the loan-to-deposit ratio is too high, commercial banks may have certain liquidity risks.
Yilian Bank stated in its financial report that during the reporting period, the bank increased its core liabilities by increasing its offline deposit business through its business department; absorbing deposits through self-operated platforms such as WeChat Bank and Yilian App to further expand the scale of self-operated customers and self-operated channel deposits; increasing the scale of deposits in the insurance industry; actively conducting peer credit cooperation with various financial institutions, obtaining financial support from financial institutions, and improving liquidity supply supplementary capabilities to manage liquidity risks.
In this year’s first quarter report, Yilian Bank further disclosed that the bank’s liquidity gap ratio is currently higher than regulatory standards and its liquidity is in a safe zone. The bank's loan-to-deposit ratio further rose to 118.09% in the first quarter.
Fumin Bank disclosed in its financial report that the bank regularly conducts liquidity risk stress tests every quarter and continuously improves stress testing methods. Currently, the bank's overall liquidity risk is controllable.
Xinwang Bank stated that in 2020, the bank continued to expand its sources of liabilities, optimize its liability structure, maintain reasonable liquidity emergency reserves based on business development, regularly conduct liquidity stress tests and liquidity emergency drills, and apply information systems to improve liquidity risk management capabilities and refinement. In 2020, the bank's liquidity risk appetite was reasonable, its management strategies, policies and procedures were appropriate, and no liquidity risk events occurred.
In addition, judging from the latest situation in the first quarter of this year, the deposit balances of Yilian Bank and Zhongguancun Bank have increased and decreased, which may mean that the deposit situation of private banks will become more differentiated this year.
