After years of effort, the restructuring of the former consumer finance giant, Jiexin Consumer Finance, has finally come to fruition.
According to the announcement released by Tianjin Bank, the bank will participate in the restructuring of Jiexin Consumer Finance with two companies under JD.com and Foreign Trade Trust. After the restructuring is completed, JD will hold 65% of the shares and become the controlling shareholder of Jiexin Consumer Finance.
JD.com will become the controlling shareholder
On December 20th, Tianjin Bank announced that it will contribute 500 million yuan to participate in the equity restructuring of Jiexin Consumer Finance led by JD.com.
According to the work arrangement, the registered capital of Jiexin Consumer Finance will be adjusted from 7 billion yuan to 5 billion yuan through equity restructuring methods such as first reducing capital and then introducing strategic investors for capital increase. Among them, Home Credit N.V. (hereinafter referred to as the "Home Credit Group"), the existing shareholder of Jiexin Consumer Finance, does not receive any reduction or payment from Jiexin Consumer Finance in the capital reduction process.
The capital increase program will introduce Guangzhou Jingdong Trading Co., Ltd., Online Banking (Beijing) Business Service Co., Ltd., China Foreign Economic and Trade Trust Co., Ltd., Tianjin Economic and Technological Development Zone State owned Assets Management Co., Ltd., and Tianjin Bank as new shareholders.
According to the announcement, after the completion of the equity restructuring, Guangzhou Jingdong Trading Co., Ltd., Online Banking (Beijing) Business Service Co., Ltd., Foreign Trade Trust, Tianjin Economic and Technological Development Zone State owned Assets Management Co., Ltd., and Tianjin Bank will contribute 2.5 billion yuan, 750 million yuan, 600 million yuan, 550 million yuan, and 500 million yuan respectively, with contribution ratios of 50%, 15%, 12%, 11%, and 10%. The proportion of capital contribution from the original shareholder, Jiexin Group, has been reduced to 2%.
According to the data, among the five newly introduced shareholders, the top two major shareholders, Guangzhou Jingdong Trading Co., Ltd. and Online Banking Online (Beijing) Business Services Co., Ltd., are both wholly-owned subsidiaries of JD.com. This means that JD will hold a 65% stake in Jiexin Consumer Finance, becoming its controlling shareholder.
JD.com is expected to obtain a consumer finance license
Jiexin Consumer Finance was established in 2010 and is one of the first four pilot companies for consumer finance. It is also the only foreign-owned consumer finance company in China. The company is registered in Tianjin and conducts personal consumer credit business nationwide.
In the early days of its establishment, Jiexin Consumer Finance developed rapidly and became the first consumer finance company in the industry with assets exceeding 100 billion yuan in 2019. However, since then, the company's performance has declined, and the controlling shareholder revealed plans to "change ownership" in 2022. The market has also reported multiple potential investment institutions, but none of them have been confirmed in the end.
In 2023, the pre tax net profit of Jiexin Consumer Finance was -4.265 billion yuan, the post tax net profit was -3.199 billion yuan, and the audited owner's equity was 800 million yuan.
Tianjin Bank stated in the announcement that this investment in Jiexin Consumer Finance is a shareholding restructuring project led by the Tianjin Municipal Government. Prior to the completion of the restructuring, Jiexin Consumer Finance will properly settle, restructure, or dispose of all of its financing liabilities, related party liabilities, and operating liabilities.
In recent years, with the continuous tightening of regulatory policies and the increasing entry barriers, the "value" of consumer finance licenses has also been rising.
JD Group began to layout in the consumer finance field as early as 2014 and has accumulated rich experience. Industry insiders believe that through this restructuring, on the one hand, JD.com is expected to obtain a consumer finance license; On the other hand, it is beneficial for Jiexin Consumer Finance to improve its risk control and management level, and reduce risks.
JD.com stated that under the guidance of the Tianjin Municipal Government and relevant regulatory agencies, the company will participate in the restructuring of Jiexin Consumer Finance in an orderly manner with China Foreign Economic and Trade Trust Co., Ltd., Tianjin Economic and Technological Development Zone State owned Assets Management Co., Ltd., Tianjin Bank, and Jiexin Group, creating a better consumer experience for consumers.
Tianjin Bank stated that investing in Jiexin Consumer Finance is beneficial for the bank to expand its inclusive finance customer base, enhance its inclusive finance development capabilities, promote mutual promotion and coordinated development with other investors in the new development pattern, advance professional market-oriented operations, innovate financial products, and improve profitability. This will help the bank maintain its competitive advantage in fierce market competition and achieve sustainable development.