China Construction Bank to set up consumer credit unit

What’s new: China Construction Bank Corp. obtained the authorization to create a consumer credit unit, thus becoming the third public lender to have a specific unit dedicated to the granting of personal consumer loans.

China Construction Bank plans to invest 6 billion yuan ($835.9 million) to establish CCB Consumer Finance Co., the bank said. The unit will have a registered capital of 7.2 billion yuan.

Beijing State-owned Assets Management Co. plans to contribute 800 million yuan and take an 11.11% stake in the unit, and Wangfujing Group Co. intends to contribute 400 million yuan for a 5.56% stake, the bank said.

In addition to providing personal consumer loans, the unit will accept deposits from shareholders and their domestic subsidiaries, issue financial bonds, sell insurance products related to consumer loans and invest in investment activities. in fixed-income securities, the bank said.

The background: By the end of 2021, China had 30 consumer finance companies with total loan balances of 710.6 billion yuan, up 44.2 percent year-on-year, according to the China Banking Association.

The Bank of China and the Postal Savings Bank of China are the other two major state-owned banks that have established consumer credit units.

In the first half of 2022, a resurgence of the Covid-19 pandemic hammered household consumption, and many credit card loans from banks fell. China Construction Bank President Zhang Jinliang told the bank’s half-year earnings conference that he expects personal consumer loan growth in the second half to be better than the first. semester.

Quick Takes are condensed versions of China-related stories for quick news that you can use. To read the full story in Chinese, click here.

Contact journalist Denise Jia ([email protected]) and editor Bob Simonon ([email protected])

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