In 2021, the recurrence of the epidemic had a sustained impact on the social economy, and the credit card business was also severely impacted. However, the issuing banks adhere to the determination of development and actively responded and worked hard to resolve the many difficulties encountered in the credit card business in 2020.
The regulatory authorities implemented the "Notice on Promoting the Market-oriented Reform of Credit Card Overdraft Interest Rate" on the first day of 2021. The limit on credit card overdraft interest rates of 0.035~0.05%/day has been completely relaxed, reflecting the regulatory authorities' determination to reshape the status of credit card business in the consumer finance field. The issuing banks implement free pricing based on their own development needs and the positioning of different users. However, after a year of observation, only a few banks have launched preferential overdraft interest rate products, which indirectly reflects the lack of awareness of the issuing bank's grasp and utilization of relevant policies.
At the end of 2021, the regulatory authorities issued the "Notice on Further Promoting the Standardized and Healthy Development of Credit Card Business (Draft for Comments)", which put forward rectification requirements for credit card business from many aspects such as business management, standardized card issuance, credit risk control, installment business, consumer protection, external cooperation, etc. Through measures to regulate the healthy development of credit card business, credit card business can be corrected and "forced" the transformation of credit card business from extensive development to refined management.
According to Central Bank "Overall Situation of the Operation of Payment System in 2021", the total number of cards in use in 2021 was 800 million, an increase of 2.83% year-on-year, a growth rate of 1.41 percentage points lower than in 2020, setting a new low. In 2021, major issuing banks showed a "differentiation" in terms of scale growth. State-owned/jointly-stock banks have already had a relatively large market share, so their growth was weak. In comparison, urban commercial/rural commercial and rural credit banks showed a relatively strong growth momentum, with an average growth rate of 18.6%.
In the credit card market, it has become an irreversible trend to shift from the previous growth in scale to the existing user's inventory mining direction. On the one hand, the product is required to be more refined to attract users of other competitors, and on the other hand, it fully explores the value of its own users, that is, to increase transaction volume, so as to achieve transaction fees and interest income by increasing the loan balance.
Among state-owned/joint-stock banks, China Merchants Bank , Ping An , CCB , CCB , Bank of Communications had a credit card transaction volume of more than 3 trillion yuan in 2021, and China Merchants Bank credit card hit a new high of 4.76 trillion yuan, and maintained more than 4 trillion yuan for three consecutive years, far ahead of the entire industry and ranked first; Ping An Credit Card also maintained a level of 3 trillion yuan for three consecutive years, ranking second. Among the rural credit banks, among the banks that announced their credit card transaction volume, Shanghai Bank Credit Card ranked first in the transaction volume with 144.6 billion yuan, and Zhongyuan Bank exceeded 100 billion yuan for the first time, ranking second; among other banks, many credit card transaction volumes achieved a growth rate of 18 to 54%.
Credit card loan balance is an important source of interest income. Among the credit card business income of China Merchants Bank, interest income reached 60 billion yuan, accounting for 68%. The increase in the amount of credit card transactions has also driven the growth of credit card loan balances. Among state-owned/joint-stock banks, the credit card loan balances of CCB and China Merchants Bank reached 896.2 billion yuan and 840.3 billion yuan respectively, exceeding the third place of 100 billion yuan; among the city-commerce/rural commercial and rural credit banks, Guangzhou Bank was the only one, with the loan balance reaching 89 billion yuan, leading the second place of 50 billion yuan.
In the past two years, the risk of common debt caused by the epidemic has increased the total amount of non-performing loans in credit card business. However, in 2021, after the various policies of the issuing banks were introduced, the non-performing loans in credit card business were effectively controlled. Except for a few other banks, the vast majority of banks showed a downward trend, with the total outstanding credit amount of six months overdue in 180 days decreased to 86.039 billion yuan, an increase of only 2.59% year-on-year, and the impact of the epidemic was effectively controlled.
The characteristics of the Chinese credit card market in 2021 are: the scale of state-owned/share-owned card issuing banks has slowed down, but the requirements for exploring user stocks are becoming more and more obvious, and more attention is paid to the consideration of transaction volume and overdraft balance; while urban commercial/rural commercial and rural credit banks, although the market pressure is still great, some banks still show urgent needs for development. After all, they also have advantages in their local market, but they still need to make breakthroughs in their business philosophy.
In 2021, although the credit card market is full of difficulties, it is also seen that many banks still maintain strong development momentum, especially the signs of some banks shifting from relying on scale to stock development are very obvious. In 2021, the regulatory authorities issued the "Notice on Further Promoting the Standardized and Healthy Development of Credit Card Business (Draft for Comments)", which put forward higher requirements for the development of credit card business, reflecting the determination to reshape the important position of credit card business in the consumer finance field.
This magazine tracks 34 listings (including A shares and Hong Kong shares ), as well as the credit card performance of some non-listed banks in 2021, and after sorting, summarizing and analyzing, it released the "Overall Situation of China's Credit Card and Payment Market in 2021". Through this industry analysis, industry peers can understand the current situation of the credit card market in a panoramic way. They also hope that the credit card industry will work together to adjust its business business strategies according to the situation, and reorganize with the help of the "new policy" to achieve the goal of enhancing the market competitiveness of the products and the industry's strength.
(Note: Although Zhejiang Merchants, Hengfeng and Bohai are affiliated to joint-stock banks, they are limited by their scale and are included in the city business/rural business and rural credit bank in statistics and analysis)
Attachment: "Overall Status of China's Credit Card and Payment Market in 2021"
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