Guotai Haitong Securities released a research report stating that since 2024, the growth rate of consumer loans has decelerated. Major state-owned banks have actively responded to policies promoting consumption, significantly increasing their consumer loan disbursements, while consumer finance companies have maintained relatively rapid scale expansion. Currently, bank credit consumer loan interest rates have generally rebounded above the 3% regulatory threshold. Influenced by new regulations on assisted lending, online loan interest rates are now constrained below 24%. Looking ahead, the non-performing loan (NPL) ratio for consumer loans may still face upward pressure in the short term, but is expected to gradually stabilize over the medium to long term as the economy improves, regulatory policies take effect, and banks' risk control capabilities enhance. Key points from Guotai Haitong are as follows:
Volume: Consumer loan growth has slowed, with major state-owned banks showing stronger disbursement efforts. By the end of Q3 2025, the outstanding balance of consumer loans (excluding personal housing loans but including credit cards) reached 21.29 trillion yuan, a year-on-year increase of 4.2%, indicating a deceleration in growth compared to previous periods. Since 2020, consumer loans have shown a trend towards longer durations; by the end of Q3 2025, the proportion of medium to long-term loans increased by 12.1 percentage points from the end of 2020 to 53.9%. 1) Bank consumer loans accounted for approximately 27% (about 5.80 trillion yuan by the end of Q2 2025). Among listed banks, consumer loans from major state-owned banks, joint-stock banks, and city/rural commercial banks were 2.7 trillion yuan, 1.8 trillion yuan, and 1.2 trillion yuan respectively (representing 2.6%, 5.1%, and 9.7% of their total loans). These grew by 26.0%, 2.4%, and 12.1% year-on-year, respectively. 2) There are 31 licensed consumer finance companies, accounting for about 7% of the market. By the end of 2024, their total assets reached 1.38 trillion yuan, a year-on-year increase of 14.6%. Based on data from 18 consumer finance companies (with combined assets of 1.2 trillion yuan), their asset size grew 14.6% year-on-year by the end of Q2 2025, maintaining a relatively fast pace. The remainder consists of credit cards (approx. 41%) and auto finance companies, microfinance companies, and internet consumer finance platforms (collectively approx. 25%).
Price: Floor rate set at 3%, online loan rates gradually being reduced. 1) Credit consumer loans: Since 2023, price competition for consumer loans intensified, with some bank products offering rates as low as 2.4%. According to the Securities Times, starting April 2025, the annualized interest rate for credit consumer loan products may be adjusted to no less than 3%. 2) Consumer finance companies: Their lending rates to customers have shown a declining trend. Zhaolian Consumer Finance's average customer lending rate was 19.3% in 2019, falling to 14.8% by 2024. Similarly, Minsheng Consumer Finance, which previously had higher rates, decreased from 27.2% in 2020 to 22.1% in 2024. Note: The "Notice on Strengthening the Management of Commercial Banks' Internet Assisted Lending Business and Enhancing Financial Service Quality" stipulates that, from October 2025, the comprehensive financing cost "implicit red line" must not exceed 24%.
Quality: Sample banks' consumer loan NPL ratio is 1.56%, NPL pressure may be stabilizing. 1) Data from 12 sample banks (including 5 major state-owned banks, 4 joint-stock banks, and 3 city/rural commercial banks) show that the consumer loan NPL ratio has been on a continuous upward trend since the end of 2023. By the end of Q2 2025, the consumer loan NPL ratio (post-write-off) was 1.56%, up 5 basis points from Q4 2024, while the outstanding balance of consumer loan NPLs increased by 25% year-on-year. 2) Combining data from assisted lending platforms, Qifu Technology's 90+ day delinquency ratio was 2.09% in Q3 2025, up 12 basis points from the previous quarter. Over a longer cycle, previous peaks occurred in Q2 2020, Q2 2022, and Q2 2024, with corresponding 90+ day delinquency ratios of 2.82%, 2.62%, and 3.40% respectively. The current 90+ day delinquency ratio remains at a relatively high level, but the marginal rate of increase has slowed. Other major assisted lending platforms, such as Lexin and FinVolution Group, also show similar trends.
Risk warnings: Insufficient demand for consumer loans; slower-than-expected growth in resident income; intensifying competition among banks.
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