When it was first announced in August last year, the LPR for one-year period was 4.25% and that for five-year period was 4.85%. Since then, there have been several downward revisions. The latest one was in April 2020, and there has been no further adjustment since then.
As we all know, the requirement of interest rate marketization is that financial institutions should timely adjust deposit and loan interest rates according to the actual situation of the market, so as to fully meet the reasonable demand of the market for funds, and at the same time, effectively prevent the risk of imbalance between supply and demand, and promote economic development. The formation of LPR by means of marketization not only promotes the marketization process of loan interest rate, but also improves the transmission efficiency of market interest rate to credit interest rate. Because of this, investors in the capital market attach great importance to the trend of LPR. After all, it is impossible for the central bank to adjust the benchmark interest rates of deposits and loans at any time, and the open market operation is also oriented to financial institutions. To understand the recent trend of loan interest rates, people mainly rely on LPR.
Since the second half of last year, LPR has been adjusted several times, especially in the first half of this year. The pace of adjustment should be relatively fast. Obviously, this was related to the market environment at that time. Affected by the novel coronavirus pneumonia, a period of time in the beginning of this year, domestic economic activities encountered great difficulties. Many enterprises were in a state of not functioning normally. At that time, the LPR was cut down in time, laying a solid foundation for commercial banks to substantially lower the interest rate of loans, and playing a positive role in promoting the real economy to go out of the trough.
In other words, the downward trend of LPR also makes investors see the basic trend of market interest rate fall, which also has the role of guiding private funds to flow to the stock market to a certain extent. Some time ago, there are many reasons for the increase in the price of the stock market, but we cant help saying that the LPR reduction also played a certain role.
In July this year, the central bank announced that it would cut the refinancing and rediscount interest rates for commercial banks, which was regarded as a signal by many market participants that the central bank would cut the benchmark interest rate for deposits and loans of financial institutions. Affected by this, the stock market once showed an accelerated upward trend. But then it was found that as an important reference for the trend of short-term interest rates, LPR did not adjust.
What does that mean? First of all, the central banks reduction of refinancing and rediscount interest rates is not to prepare for a comprehensive reduction of interest rates, but only to reduce the burden of commercial banks; secondly, based on the fact that the real economy has begun to recover, financial support for the economy is more reflected in the use of quantitative means to meet the demand for scale, rather than focusing on stimulating the formation of new demand through price means, which is to guard against low efficiency At the same time, it is also necessary to ensure the normal capital price system and realize the basic balance of supply and demand.
So, what is the significance of such a guidance for the stock market? To put it simply, in the first half of this year, the situation that social funds entered the stock market on a large scale due to the reduction of market interest rate is not visible at least at present. Therefore, the stock market rising market driven by liquidity has come to an end.
At this time, if the stock market wants to continue to rise, it needs more promotion from enterprise performance. Because of this, it is not easy for the market to rise in large volume at present, and the blue chip stocks with excellent performance will have more opportunities. Early very active technology stocks, if the growth can not be reflected quickly, then temporarily will be a bit lonely.
By the way, judging from the current economic situation, it is unlikely that the LPR will be lowered in the near future, and certainly not likely to rise. Investors in the operation, may as well have more thinking about such a pattern.
The sword of 4 times LPR interest rate is hanging high, consumer finance is afraid to retreat
On November 15, the heads of several consumer finance companies said in an interview with the times weekly that they had not heard of the relevant information that the interest rate of new loans issued by consumer finance companies shall not exceed 4 times LPR, and they are still in a wait-and-see state. However, if the new standard is fully implemented and the interest rate is reduced to 15.4%, the consumer finance companies will face greater operational pressure.
Recently, some media disclosed that the supervision of consumer finance companies in some areas along the southeast coast has been guided by the window, requiring that their new loan interest rate should not exceed 4 times the maximum LPR interest rate, that is 15.4%, causing a huge shock in the consumer finance industry.
At present, it is not clear how many consumer finance companies have been guided by the regulatory window, but the impact of the new four times LPR regulation on consumer finance companies can not be ignored.
On November 15, Zhang Feng, a partner of Wanshang tianqin law firm, pointed out that the latest four times LPR new rules should only be applicable to private lending. Financial institutions set interest rates according to their own conditions. Of course, if the regulatory authorities have specific requirements, it is also a kind of compliance guidance.
It is embarrassing that there is no clear authority on whether the latest judicial protection limit of private lending interest rate issued on August 20 is applicable to consumer finance companies.
Time weekly found that since August, there have been four times LPR and 24% rulings in judicial precedents.
At present, in the loan lawsuits related to consumer finance companies, there are not many cases that implement the new four times LPR regulation.
How important is the upper limit of interest rate judicial protection
Prior to that, on August 6, 2015, the supreme law issued the provisions of the Supreme Peoples Court on Several Issues concerning the application of law in the trial of private lending cases, which defined two red lines of 24% and 36% annual interest rate of private lending, namely two lines and three areas.
As of August 20 this year, the supreme law clearly revised the upper limit of judicial protection of private lending interest rate to 4 times LPR, greatly reducing the judicial protection upper limit of private lending interest rate. In fact, the reduction of the upper limit of private lending interest rate protection has a direct impact on the development of consumer finance.
On November 14, Yu Baicheng, President of the zero one research institute, told the times weekly that reducing the lending interest rate is the common direction of all kinds of institutions. Based on financial fairness, the financial regulatory authorities will also adjust the corresponding regulatory requirements to further reduce the interest rates of financial institutions.
The judicial protection upper limit of lending interest rate, to some extent, is the interest rate ceiling of lending institutions, which has a great impact on the operation of various lending institutions.
Taking home credit consumer finance Co., Ltd. (hereinafter referred to as home credit consumer finance) as an example, according to the jieying 2020 phase III personal consumption loan asset securitization trust announcement, the total amount of home credit consumer loan loans of the Chinese subsidiary of home credit group in the first half of 2020 was 2.89 billion yuan, of which 85.47% were loans with interest rate of 21% Interest rates are not more than 24%.
Obviously, all loans meet the requirements of two lines and three zones. However, once the window guidance is issued, the upper limit of interest rate will be reduced to 15.4%, which is undoubtedly worse for consumer finance companies represented by home credit.
According to the financial statements of home credit group, in the first half of 2020, the transaction volume of new loans of home credit group decreased by 44.2% year-on-year, of which the decline rate of China market reached 57.6%.
At the same time, the financial report shows that in the first half of 2020, the impairment provision of home credit increased significantly, from 871 million euro to 1.8 billion euro, an increase of 105.6%.
The effect of transformation remains to be observed
In the prospectus issued in July 2019, home credit group once said that at present, Chinas consumer finance market participants are mainly banks, licensed consumer finance companies and non-traditional consumer finance providers, and its main competitors are consumer finance companies based on traditional banks.
At the beginning of this year, home credit Xiaojin formulated the 2020-2023 strategy to transform online, create a offline + online new retail closed-loop, and open up new scenes for consumers in vertical fields such as 3C products, household appliances, home furnishings, tourism, vocational education, fitness, etc.
On November 14, the person in charge of an online consumption platform in Beijing revealed that this year, due to the impact of the epidemic, offline to online has become a trend in the consumer gold industry. The platform hopes to expand customer acquisition channels and consumption scenarios through online channels, so as to achieve diversified operation. Some consumer gold platforms have also entered the field of e-commerce, but they face many difficulties. Due to the lack of e-commerce gene, most of the platforms can provide few commodity categories, have few choices, and have few users. In addition, it is difficult to obtain direct sales channels from big brand companies.
Wang Pengbo, an analyst with Analysys think tank, told the times on November 16 that at this stage, the major online scenes such as consumption, travel, health care and education are almost completely divided up by the giants of all walks of life. For consumer finance companies without obvious scene advantages, how to obtain high-quality users at a lower cost has become one of the main problems to be solved in their online transformation One.
With the introduction of consumer loans such as Alipay flower, borrow, Jingdong and white stripes, the traditional advantage business of Jie Xin has been ushering in its new rival.
On November 13, the manager of a 3C store in Guangdong Lenovo told the times weekly that there were fewer and fewer people using home credit by installments. Now customers with high credit scores are using Huabei and Baitiao for staging. home credit with high monthly interest rate and low credit score chooses to use home credit, which is more difficult to pass.
Yu Baicheng told the times weekly that consumer finance companies will further stratify their customers, focus more on high-quality customers, and adjust product interest rates and risk control models. As a result, lending volume may be significantly reduced and the survival of the fittest in the industry will be intensified.