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 yuan. This 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 sector. Notably, Citic Financial Holdings Co., Ltd. (also known as "Citic Financial") has contributed 210 million yuan, while Kingdee Software (China) Co., Ltd. added 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 trajectory. With 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 industry. In the previous year, several other firms, including Ningyin Consumer Finance Company and Ant Consumer Finance Company, underwent substantial capital increases. 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 industry. As 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 rates. These factors compound to squeeze profit margins significantly. Consequently, 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 active. Notably, 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 conditions. Li 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.