The net profit of Yealink Bank fell by 70%

Produced by Dharma Finance

Recently, Jilin Yealink Bank released its 2024 semi-annual report showing that in the first half of this year, the bank achieved operating income of 605 million yuan, a year-on-year decrease of 4.87%; The net profit was 18 million yuan, a year-on-year decrease of 69.49%. While both revenue and net profit declined, the bank's assets also shrank.

As one of the four private Internet banks in China that have obtained the qualification for online credit business, the gap between Yealink Bank and WeBank, MYbank, and Xinwang Bank has gradually widened.

At the end of last year, WeBank's total assets exceeded 500 billion yuan, and MYbank's total assets reached 452.1 billion yuan. The assets of Xinwang Bank and Sushang Bank have also exceeded 100 billion yuan. The total assets of Yealink Bank are only 51.7 billion yuan, which is nearly 10 times different from WeBank.

In the first half of this year, Yealink Bank's asset scale declined again, and as of the end of June, its total assets had fallen to 48.787 billion yuan, a decrease of 2.988 billion yuan from the beginning of the year.

Yealink Bank's performance pressure has already begun to show. From 2021 to 2023, Yealink Bank achieved revenue of 1.435 billion yuan, 1.083 billion yuan, and 1.065 billion yuan respectively, and its operating income has continued to decline in the past three years.

The decline in personal loan business dragged down performance

Yealink Bank was established in May 2017 by 7 private enterprises in Changchun, including Zhongfa Financial Holding and Jilin Sankuai Technology (Meituan), with a registered capital of 3 billion yuan, and is the first private bank in Northeast China.

In the early days of its establishment, Yealink Bank promoted its "Yealink Easy Loan" online consumer loan service through cooperation with leading Internet platforms such as Meituan, JD.com, and Du Xiaoman, thus achieving rapid growth in retail credit business. From 2018 to 2020, Yealink Bank's personal loan balance showed a significant growth trend, with 5.190 billion yuan, 20.055 billion yuan and 30.726 billion yuan respectively, with an annual growth of more than 10 billion yuan.

In recent years, Yealink Bank's personal loan business has accounted for more than 93%, of which consumer loans are the main force. However, it is precisely because of this over-reliance on personal loan business that Yealink Bank's performance has declined significantly under regulatory constraints.

In terms of deposit business, in the early days of its establishment, Yealink Bank cooperated with a number of Internet financial platforms such as JD Finance, Lufax and Xiaomi Finance to provide strong support for the deposit business through multiple channels. In the second half of 2020, the regulator carried out a special rectification of deposits in cooperation with Internet platforms, and Yealink Bank removed all third-party Internet platform deposit products from the shelves in response to regulatory requirements, which brought considerable pressure on its deposit scale.

With the issuance of new regulations on Internet lending, such as the Interim Measures for the Administration of Internet Loans by Commercial Banks and the Notice on Further Regulating the Internet Lending Business of Commercial Banks, there has also been resistance to Yealink Bank's loan business channels.

In terms of the scale of personal loans, in 2021, the scale of personal loans of Yealink Bank reached a high of 34.822 billion yuan, and then began to shrink gradually. In 2022 and 2023, the amount will be reduced to 34.784 billion yuan and 31.637 billion yuan, respectively.

In addition to the pressure on performance, Yealink Bank is currently facing changes in equity and personnel. On July 29, Jilin Huayang Group, the initiating shareholder of Yealink Bank, listed and transferred 198 million shares (accounting for 6.6% of the total share capital). Huayang Group currently holds a 9.9% stake in Yealink Bank, making it the third largest shareholder of Yealink Bank.

The day after the listing and transfer of Huayang Group, Yealink Bank issued an announcement saying that the board of directors deliberated and approved the proposal of Wang Yuhai to resign as president and appoint a new president because he reached the statutory retirement age. Before the qualifications of the new president are approved, Wang Xinrui, executive vice president and secretary of the board of directors, will perform his duties on his behalf.

Previously, in June, there was market news that Jiang Yongjun, the former vice president of Ping An Bank's credit card center, would join Yealink Bank as the bank's new president. At that time, Jiang Yongjun responded to the media that the rumors were market speculation that he had not yet joined Yealink Bank. As for whether he will join Yealink Bank in the future, Jiang Yongjun did not respond.

United Life Insurance of the China Development Department was also in trouble

As of the end of June, Zhongfa Financial Holding held 30% of the shares of Yealink Bank, and Jilin Sankuai Technology held 28.5% of the bank's shares, which were the first and second largest shareholders of Yealink Bank, respectively.

Zhongfa Financial Holding is the parent company of Zhongfa Industrial Group, and the upper controlling shareholder is Tibet Zhongfa Industrial, and Dai Hao, Dai Di and Jin Yu hold 60%, 30% and 10% of the shares of Tibet Zhongfa Industrial respectively. According to public information, Zhongfa Industrial was founded in 1997 and is headquartered in Beijing, the capital, with its business covering three core sections of "bancassurance, asset management, and health and pension".

Dai Hao, 60 years old, resigned from the Harbin Municipal Bureau of Industry and Commerce in his early years and went to the sea to establish Zhongfa Industry, and entered Beijing at the end of the last century to develop real estate and engage in the pawnbroking industry. In 2005, United Life Insurance, which was jointly organized by Zhongfa Group, was opened.

The performance of United Life, which is heavily invested in real estate, is also worrying. From 2017 to 2021, the balance of investment real estate of United Life Insurance was 9.977 billion yuan, 9.882 billion yuan, 9.222 billion yuan, 10.42 billion yuan, and 11.009 billion yuan. Among them, Evergrande is included.

At the end of 2021, the balance of investment projects related to Evergrande Real Estate reached 14.16 billion yuan. At that time, the total assets under the caliber of United Life Insurance Company were only 145.114 billion yuan. From 2021 to 2023, United Life Insurance will lose 524 million yuan, 2.02 billion yuan, and 1.192 billion yuan respectively. United Life Insurance has suffered a total loss of $3.736 billion in three years.

The successive losses have put great pressure on the solvency of United Life. In the second quarter of this year, United Life's solvency was not up to standard, with a core solvency adequacy ratio of 102.78% and a comprehensive solvency adequacy ratio of 177.03%, and the comprehensive risk rating was rated as Class C due to the high operational risk.

It is worth mentioning that since the fourth quarter of 2020, United Life's risk rating has been rated C, which has failed to meet the standard for 15 consecutive quarters.

According to the solvency report for the second quarter of 2024, in the first half of this year, United Life achieved insurance business income of 12.154 billion yuan, a year-on-year decrease of 7.6%; Net profit turned from a loss of 173 million yuan in the same period last year to a profit of 211 million yuan.