CITIC Consumer Finance Gets Capital Boost
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In a significant move dated December 24, 2024, Citic Consumer Finance Co., Ltd(referred to as "Citic Consumer Finance" hereafter) announced a new round of capital increase, boosting its registered capital from 700 million yuan to 1 billion yuanThis increase is a clear indication of the organization’s ambition to reinforce its position in the rapidly evolving consumer finance sector.
The backing for this capital increase has come from its shareholders, who have shown considerable trust in the potential of the consumer finance sectorNotably, Citic Financial Holdings Co., Ltd(also known as "Citic Financial") has contributed 210 million yuan, while Kingdee Software (China) Co., Ltdadded 90 million yuan to the funding pool, maintaining the original hold of 70:30 in shareholding ratios post-increase.
This strategic move is particularly noteworthy as it comes shortly after Li Roudong took over as the chairman of Citic Consumer Finance in August of the same year
Li's leadership signals a fresh approach to navigating the turbulent waters of the financial environment, especially as the dynamics of consumer finance continue to shift.
Citic Consumer Finance has articulated that this capital rise signals the shareholders’ confidence in the future of the consumer finance industry and highlights their acknowledgment and support for the company’s strategic growth trajectoryWith these newfound resources, Citic Consumer Finance is poised to reinforce its capital strength and drive forward its ambitious development plans aimed at achieving first-tier status in consumer finance.
This capital increase is not an isolated incident but is part of a broader strategy amid ongoing transformations within the finance industryIn the previous year, several other firms, including Ningyin Consumer Finance Company and Ant Consumer Finance Company, underwent substantial capital increases
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As we move into 2024, other players like Haier Consumer Finance and Changyin Wubai Consumer Finance have also embarked on similar endeavors to bolster their capital.
Challenges abound in the consumer finance industryAs noted by Xiao Sa, a senior partner at Dacheng Law Offices, companies face rising customer acquisition costs and expanding bad asset ratios amidst continuous economic recovery and decreasing interest ratesThese factors compound to squeeze profit margins significantlyConsequently, licensed consumer finance firms are compelled to pursue transformation rigorously, with capital increase being a pivotal strategy to boost operational capabilities.
As 2024 unfolds, Citic Consumer Finance has been activeNotably, on August 12, regulatory approval was granted by the Beijing Bureau of the National Financial Supervision and Administration for three board members, including Li Roudong
Subsequently, on November 28, the firm launched a new “Term Loan” product alongside numerous promotional activities aiming to cater to the needs of new vocational workers, specialized enterprises, and urban citizens looking for better living conditionsLi emphasized that the consumer finance sector has entered an era focused on meticulous operational management featuring four key attributes - contextualized precision service, intelligent digital risk control, refined user engagement, and standardized consumer rights protection.
This initiative is far from coincidental; it reflects Citic Group’s long-term aspirations for Citic Consumer FinanceAcknowledging the intense competition and rapidly changing landscape within the financial sector—especially in the consumer finance niche—Citic Group understands that only through continuous reform, innovation, and proactive strategies can it achieve distinctiveness and accomplish sustainable, qualitative growthCitic Consumer Finance, with its previously established business foundation, professional team, and existing market impact, is seen as a prime candidate for this developmental focus, tasked with pioneering new growth models and steering industry trends
First and foremost, the company intends to significantly increase its investment in technology research and developmentIn an age dominated by digitalization and smart technologies, the power of financial technology holds transformative potential, acting as a gateway to various business expansions and service improvementsCitic Consumer Finance plans to allocate substantial human, material, and financial resources to research advanced technologies in finance, such as big data analytics, artificial intelligence, and blockchain technology, seeking innovative ways to seamlessly integrate these tools into daily operations and inject new vitality and competitive edge into the company
Citic Consumer Finance plans to establish a dedicated data mining team to deploy sophisticated mining algorithms and analytical models, aiming to process this data meticulously and garner valuable insights that can accurately reflect consumer needs