Zhang Yida then looked at Hong Haibo, general manager of the consumer finance and wealth management business group, and nuzzled at him.
Hong Haibo smiled faintly and said: "Yongbei and Daibei have lent more than 20 billion yuan throughout the year. Their asset quality performance is very stable, and the bad debt rate has always been controlled within 1%.
At present, the source of loan funds is half of the group's own funds and bank credit funds obtained from financing.
Our actions this year are: continue to expand funding cooperation channels, optimize capital structure, cooperate with trusts and insurance companies, and try to issue the first ABS bond."
If we always rely on free funds for lending, the scale will easily reach the upper limit, so it is not sustainable in the long term.
The consumer finance and wealth management business group knows how to optimize the capital structure, which makes Zhang Yida very satisfied.
He commented: "You have done a very good job. You must learn to leverage and use other people's money to make money for us.
At this point, we must learn from Leech Financial Services.
Whether it is developing a trust plan or obtaining credit from a bank or insurance company to carry out joint loans, we only need to provide 10%-20% of inferior funds or guaranteed funds to leverage 5 times or even 10 times of the loan.
Financial leverage.
We provide customer acquisition, risk control review, lending and other links. Licensed financial institutions provide funds, so everyone can make money. Only this cooperation model can be maintained in the long term.
It’s not a good idea to eat alone, and the cake won’t be big.”
Having said this, Zhang Yida looked at Hong Haibo and instructed: "Your mission in 2016 is to expand the business as much as possible while controlling asset quality.
Moreover, funding institutions must continue to optimize, and the proportion of self-owned funds must be reduced to less than 20%."
Hong Haibo smiled and nodded: "Leech Golden Clothes does have its own set of skills, and we must follow their example.
If the banks don’t change, we will change the banks.”
Zhang Yida did not comment on this sentence. In his opinion, it is just a slogan.
Leech Financial has had a good life in the past two years, using various means to avoid supervision.
Leech has two small loan licenses, one small and micro loan license to operate Huabei, and one Shangcheng small loan license to operate Jiebei.
Both licenses are registered in Yuzhou, and the leverage limit is 2.3 times. That is, the financing balance of a small loan company must not exceed 2.3 times the company's net capital.
The total registered capital of Leech's two small loan licenses is only 3.8 billion yuan, but it has leveraged hundreds of billions of ABS funds and dozens of times of leverage, making it difficult to count the money.
Leech Financial completed off-balance sheet financing by issuing credit ABS and avoided regulatory loopholes. It is also very cunning. Chinese businessmen are first-rate in exploiting loopholes.
The specific process of ABS issuance is: Leech Financial issues loans to Huabei/Jiebei users through its licensed small loan companies to form credit assets;
Then the credit assets are packaged and transferred to the asset-backed special plan SPV designed and managed by the securities company;
The securities company carries out a structured design for the future cash flow generated by the asset pool, dividing it into several levels such as priority, secondary, and inferior;
Then the ABS bonds are issued on the exchange and subscribed by institutional or individual investors. The minimum investment is 1 million, and the number of investors cannot exceed 200.
To a certain extent, it can be regarded as a large-scale hybrid P2P, but it is very safe and needs to go through multiple stages of review before ABS bonds can be issued.
In addition, ABS sponsors must purchase subordinated bonds that account for 5%-20% of the bond issuance scale.
It is equivalent to giving priority and secondary investors or institutions a backing. When distributing income, priority is given to priority and secondary investors to meet their expected returns, and then it is the turn of inferior investors;
When you lose money, you lose money first, then the next level, and then the next level, the priority.
However, Leech Financial has done a good job in risk control and its asset quality is very stable, so it cannot lose money even if it wants to.
After the assets were securitized, the loan balances of Borrowing and Huabei were reduced, and the transfer of credit assets from on-balance sheet to off-balance sheet was successfully completed, and the regulatory agencies could no longer control them...
After investors purchase ABS shares, the on-balance sheet loans of Huabei and Huabei are converted into cash. The two small loan companies receive sufficient cash flow back and can continue to lend.
Lending creates new credit assets, and ABS can be issued again, and then the balance sheet is completed again.
In this cycle, Leech Gold took 3.8 billion and released hundreds of billions of credit balances...
The senior interest rate of ABS bonds is generally between 4% and 6%. Counting subordinates and juniors, the interest rate is only 8%.
As for Huabei and Jiebei, the interest rate is between 8% and 21%, with an average of around 15% and 16%.
An interest rate spread of seven or eight points, a loan volume of two to three hundred billion a year, and a revenue of one to two billion.
"Mr. Zhang~Mr. Zhang~"
Hong Haibo shouted several times before Zhang Yida came back to his senses, smiled awkwardly and said, "I just wanted to wear the leech gold suit."
"By the way, we have been preparing for the issuance of the first ABS bond for several months. When will it start?" Zhang Yida asked Hong Haibo again.
“Law firms, accounting firms, rating agencies, and evaluation agencies all prepare the materials and submit them together.
Now we are waiting for the review and approval from the Shanghai Stock Exchange, and the road show can start as soon as this month."
Hong Haibo continued to introduce: "This issue of ABS is issued by Hanzhou Securities, and ICBC is responsible for fund custody.
Named "Hanzhou Securities-Ruixiang Jinke Phase 1 Asset Support Special Plan", the total issuance scale is 1 billion yuan.
Among them, priority A accounts for 80%, with a rating of AAA and a coupon rate of 4.0%;
Priority B grade, which is actually the second grade, it is better to call it priority B, accounts for 12.5%, is rated AA+, and has a coupon rate of 4.6%;
The inferior grade accounts for 7.5% and is subscribed by ourselves without rating or setting expected returns."
"Okay, hurry up, lest the meat is all eaten up by Leech Jin, and they don't even have a mouthful of soup."
Zhang Yida turned his pen around in his hand and then typed out this sentence.
"Mr. Zhang, don't worry. Just invest in our assets and funds, which are no less than those of Leech Financial Services. If you put them on the market, they will be a piece of cake. There is no shortage of investors."
"Okay, stop showing off. Let's take a look at the financial report of Leech Financial Services Group." Zhang Yida ordered again.
Hong Haibo released the PPT again and said: "According to the agreement that Ahri can share 37.5% of Leech Financial's pre-tax profits, through Ahri's financial report, we can see Leech Financial's pre-tax profits in the past two years.
In 2014, it was 5.7 billion yuan, and in the four quarters of 2015, it was 709 million, 971 million, 1.235 billion, and 1.339 billion yuan respectively.
The total profit in 2015 was only 4.2 billion yuan, 1.5 billion yuan less than in 2014.
Why is this happening?
The situation is actually similar to ours. Leech Financial Services Group is investing heavily in research and development and increasing subsidies for mobile payment users."
"We are different from them. Their cash cow is consumer finance business, while we are one of the seven financial supermarkets.
Through this speculative financial report, we can see how vast a market consumer finance is.
Therefore, with the growth of financial supermarkets slowing down, consumer finance business will surely become an important growth engine for our group’s revenue.”
Speaking of this, Zhang Yida reversed: "Of course, we must also pay attention to the technology business. I don't want to give the outside world the impression that Ruixiang is a financial company.
Just like Leech Financial Services Group, income from financial services can be said to be technical income.
It just advertises itself as a technology company.
Technology companies have a P/E ratio of 30 to 50 times, while financial companies only have a P/E ratio of 10 to 8 times.”
Everyone laughed. Everyone was an expert and naturally knew the various tricks of Leech Golden Clothes.
"Lan Lan, please report on the operation status of the overseas business group!"
As soon as Zhang Yida finished speaking, Lan Lan, who is also the general manager of the overseas business group, stood up and said:
“Currently, Ruixiang’s mobile payment has been launched in 5 countries, including South Korea’s Toss, RB’s PayPay, Singapore’s GrabPay, Indonesia’s RPay, and India’s BBPay.
India is the second most populous country in the world, and Indonesia is the fourth most populous country in the world.
The markets of these two countries are undoubtedly the largest. At the same time, RPay and BBPay are also the two joint ventures in which we hold the largest shares and have the strongest control.
I think we need to increase the allocation of resources between these two companies."
After she finished speaking, Zhang Yida said: "Okay, we have another important goal this year - Africa.
At present, I have negotiated an investment in Transsion Mobile. This mobile phone company is specifically targeting the African market and occupies 30% of the mobile phone market share in Africa.
Next, we will cooperate with them on mobile APP pre-installation software.
Lan Lan, you can start thinking about organizing a team to be sent to Africa."
"Isn't Africa a bit chaotic? War, disease, poverty... Is a place like this suitable for promoting mobile payments?" Wang Lina raised her own question.
“Some countries in Africa are very chaotic, but there are also political stability, such as Egypt and South Africa.
We will enter from safe countries first and expand outward little by little."
Zhang Yida is quite helpless. Africa is quite noisy and there are really not many safe countries.
“With the call of the Belt and Road Initiative, many domestic factory owners have gone to Africa to set up factories, and some are also engaged in trade.
They can go, so why can’t we go?”
Lan Lan stated her position very firmly. The men present, including Zhang Yida, were very convinced after hearing this. He was a ruthless character.
“Let’s start with the tourist market that China has traveled to in the past, and do cross-border payments.
For local business, I suggest that we develop it more steadily."
Lin Zhenyang looked worried and said: "What I mean is that if any country is in chaos, all the initial investment will be wasted."
"I agree, try not to burn money in the early stage, or burn as little money as possible. If something happens, you can still afford the loss." Gu Panpan also expressed his opinion.
"Okay, I don't ask for results in a short time, let's plant a flag first. Ruixiang now needs globalization to enhance our intrinsic value."
Zhang Yida doesn't expect anything to happen in the African market, he just needs to capture the top of the mountain first.
"By the way, on the industrial fund side, if there are investee companies that want to sell old shares, we will also sell some appropriately."
Lan Lan was a little puzzled by Zhang Yida's approach and asked: "Why? Don't wait any longer?"
"The equity investment market has been too prosperous in recent years. When it prospers, there are many bubbles. It is not surprising that the valuations of the primary market and the secondary market are inverted.
We also need to diversify investment risks."
Of course Zhang Yida would not tell her about the frequent listings of unicorns in the next few years, so he just found a reason to diversify investment risks.
"Well, if there is a suitable opportunity, I will take action and withdraw the funds appropriately."
Speaking of this, Lan Lan said with a troubled face: "Mr. Zhang, our investment of US$330 million in Lazanda is too much, isn't it?
We Ruixiang ourselves are not involved in the e-commerce industry, so we can’t afford to be so big, right?”