ChinaFintech – Tencent’s WeBank Totaled 100M Personal Loans as of 2017

WeBank (微众银行), the direct bank affiliated to Tencent, saw the total originations of personal loans surpassed 100 million in 2017 since its incorporation in 2014, according to WeBank 2017 annual report.

It provides Weilidai (微粒贷), a short-term personal loan product available on Tencent’s messaging apps (WeChat and Mobile QQ), and auto financing product Weichedai (微车贷) to individual borrowers. The outstanding loans of Weilidai reached RMB100 billion (US$15 billion) in 2017, according to Tencent Q4 2017 earnings report. For businesses, WeBank launched Weiyedai (微业贷) in 2017.

The total loan originations and the total number of borrowers increased respectively by 170% and 327% to RMB 870 billion (US$133 billion) and 12 million as of the end of 2017.

92% of the loan balances were less than RMB 50,000 (US$7640). 74% of the loans cost borrowers less than RMB 100 (US$15).

74% of the individual borrowers were in jobs lower paid than white-collars. Loan delinquency rate in 2017 was 0.64%, up from 0.32% for the previous year.

The total outstanding loan balance and assets increased by 55% and 57%, respectively.

Some 50 partnering financial institutions accounted for 75% of the total loan originations.

Total revenues increased by 175% in 2017, with net interest income and servicing fees increased by 140% and 305%, respectively.

Net profit increased by 261%. The average interest rate was down by 45 percent points in 2017.

The total number of registered customers increased by 214% in 2017 to over 60 million. They are located in more than 500 cities across China.

Source: WeBank, MyBank (Click to enlarge)

ChinaFintech – Tencent’s Mobile Consumer Credit Product Weilidai Exceeds RMB100bn in Loan Balance

The outstanding loans of Weilidai (微粒贷), the short-term cash loan product available on Tencent’s messaging apps, had surpassed RMB100 billion (US$16 billion) as of the end of 2017, according to Tencent Q4 2017 earnings report. The non-performing loan ratio was low, said the company.

Weilidai is operated by WeBank, the direct bank in which Tencent has a 30% stake. Launched in 2015 on Tencent’s two social apps, Mobile QQ and WeChat, it’s available to users who are deemed creditworthy by the company’s own big data-based credit risk scoring engine.

The cumulative originations had surpassed RMB300 billion (US$ 47 billion) and total users exceeded 20 million in the first quarter of 2017, according to Wan Jun, COO of WeBank. Local media estimate that the cumulative volume had reached RMB400 million in 2017. (links in Chinese) An overwhelming majority of the loan capital is from partner banks.

The online consumer credit offerings of Ant Financial, the fintech arm of Alibaba, has surpassed RMB 600 billion (US$95 billion), Bloomberg reported earlier this month.

The major capital source for the two major consumer credit products Ant Financial offers is securitization. The company issued over RMB240 billion (US$ 38 billion) asset-backed securities in 2017.

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The revenue growth of Tencent’s payment and financial services business in 2017 was driven by 1) consumer withdrawal fees, 2) fees from commercial transactions, 3) interest income and 4) finance offerings including Weilidai, according to Tencent management. The gross profit margin for this business segment increased in 2017. The company expects to invest aggressively in it in 2018.

Licaitong, Tencent’s online platform for personal investment products, aggregated over RMB300 billion (US$ 47 billion) assets under management as of the end of January 2018.

Offline payment transaction volume more than doubled year-on-year in 2017. The total volume of red envelope gifting, cash gift transfers among accounts on Tencent’s two messaging apps, decreased year-on-year but the overall money transfer volume increased year-on-year.

Tencent’s Active Mobile Payment Users Reached 600M in Q416

Monthly active users of Tencent’s mobile payment services and average daily payment transactions through them both surpassed 600 million in December 2016.

Red Packet transfers, however, are counted as payment transactions and account for the largest portion of the total transaction volume, followed respectively by payments to online businesses and at physical locations, according to Tencent management.

The breakdown among WeChat Payment, QQ Wallet and third-party mobile businesses who have added either/both of the two mobile payment services isn’t disclosed.

Payments and cloud services recorded RMB17 billion in revenue in 2016, so far the least profitable segment for Tencent that the combined cost of revenue is as high as RMB14 billion. The company believes their cloud service is the No. 1 in gaming and video segments in China.

Source: Tencent

Tencent’s 2016 revenues increased 41% from the previous year, mainly driven by revenue growth in smartphone games. Tencent recorded RMB70.8 billion in total gaming revenue for 2016, a 25% year-over-year growth. NetEase, its distant competitor in gaming, recorded RMB28 billion in gaming revenues last year.

Smartphone game revenues increased 80% year-over-year to RMB38.4 billion in 2016. ARPU of mobile game is RMB145-155 in the fourth quarter.

Honour of Kings, in-house developed mobile game and similar to Tencent’s own LoL in theme and design, surpassed 50 million daily active users as of the end of 2016.

Social networks revenues, generated from premium subscriptions, virtual items and paid digital content, increased by 54% year-over-year to RMB37 billion, mainly driven by sales of digital content and game-related items.

Tencent Video’s paying users surpassed 20 million in 2016. iQIYI and Youku-tudou, its direct competitors announced 20 million and 30 million paying users in June 2016 and December 2016, respectively. Tencent believes they are the No. 1 in terms of mobile video views.

Daily active users of Karaoke service WeSing reached 35 million as of the end of 2016, more than doubled year-on-year. It monetizes, like many other Chinese Karaoke services and live streaming services, through virtual gift sales.

Daily paying readers of its online literature publishing platform were around 2.5 million, more than doubled year-on-year.

Source: Tencent