Yirendai Reports Second Quarter 2018 Financial Results

Yirendai Reports Second Quarter 2018 Financial Results

BEIJING, Aug. 29, 2018 /PRNewswire/ -- Yirendai Ltd. (NYSE: YRD) ("Yirendai" or the "Company"), a leading fintech company in China, today announced its unaudited financial results for the quarter ended June 30, 2018.


For the Three Months Ended

in RMB million

30-Jun-18

30-Jun-17

YoY Change

Amount of Loans Facilitated

11,736.2

8,536.1

38%

Total Net Revenue

1,519.6

1,183.1

28%

Net Income

204.7

269.1

-24%

Adjusted EBITDA (non-GAAP)*

563.7

378.4

49%

Adjusted Net Income (non-GAAP)*

440.5

269.1

64%

* For the second quarter of 2018, adjusted EBITDA and adjusted net income includes RMB 235.9 million adjustment on income earned from loans facilitated prior to 2018, if ASC 606 was not adopted.

In the second quarter of 2018, Yirendai facilitated RMB 11,736.2 million (US$1,773.6 million) of loans to 177,754 qualified individual borrowers through its online marketplace, representing a year-over-year growth of 38%; 23.4% of loan volume were generated by repeat borrowers who have successfully borrowed on Yirendai's platform before; 76.3% of the borrowers were acquired from online channels; 100% of the loan volume originated from online channels was facilitated through mobile.

In the second quarter of 2018, Yirendai facilitated 202,380 investors with total investment amount of RMB 12,175.4 million (US$1,840.0 million), 100% of which was facilitated through its online platform and 96% of which was facilitated through its mobile application.

In the second quarter of 2018, total net revenue was RMB 1,519.6 million (US$229.6 million), an increase of 28% from prior year; net income was RMB 204.7 million (US$30.9 million), a decrease of 24% from prior year; and adjusted net income in the second quarter of 2018 was RMB 440.5 million (US$66.6 million), an increase of 64% from prior year.

"Our operating results in the second quarter continued to be solid with loan origination volume increased by 38% from the previous quarter," commented Ms. Yihan Fang, Chief Executive Officer of Yirendai. "We have also continued to make progress in growing our online wealth management business – Yiren Wealth. Furthermore, we have seen continued efforts from the government to promote the healthy development of our industry. We will continue to execute our strategies to build Yirendai into the exceedingly compliant online platform in China to offer the safe and professional financial products and services to consumers."

"We are pleased to report another solid quarter despite a challenging market environment with business uncertainties," commented Mr. Dennis Cong, Chief Financial Officer of Yirendai. "Funding remains the key for our growth and we are proud to announce our new partnership with Xinwang Bank to further diversify and optimize our funding structure. As a top industry player with strong risk management capabilities, we believe that we are well-positioned for the upcoming P2P registration process as well as capturing the long-term growth potential thereafter."

Accounting Policy Change

The Company previously identified the investor as the only customer under ASC 606. Subsequent to the earning release for the quarter ended March 31, 2018, the Company has revised the accounting policy to recognize both the investor and borrower as customers. Accordingly, borrower's credit risk is no longer treated as variable consideration, but reflected as a provision of contract assets. The comparable unaudited consolidated financial information for the first quarter of 2018 was adjusted for such change, resulting in the recognition of provision of contract assets of RMB116.6 million, and the net revenue has been grossed up by the same amount. In addition, the Company has revised to recognize service fees charged from investor over the term of the investment period. The net impact of such changes to the net income of the quarter ended March 31, 2018 was not material.

Second Quarter 2018 Financial Results

Total amount of loans facilitated in the second quarter of 2018, was RMB 11,736.2 million (US$1,773.6 million), increased by 38% from RMB 8,536.1 million in the same period last year, reflecting strong demand for our products and services, especially from customers acquired from online channels. As of June 30, 2018, Yirendai had facilitated approximately RMB 97.6 billion (US$14.8 billion) in loan principal since its inception.

Total net revenue in the second quarter of 2018 was RMB 1,519.6 million (US$229.6 million), increased by 28% from RMB 1,183.1 million in the same period last year. The increase of total net revenue was mainly attributable to the growth of loan origination volume as well as the increase in the total asset under management.

Sales and marketing expenses in the second quarter of 2018 were RMB 793.8 million (US$120.0 million), compared to RMB617.9 million in the same period last year. Sales and marketing expenses in the second quarter of 2018 accounted for 6.8% of amount of loans facilitated, decreased from 7.2% in the same period last year due to increased marketing efficiencies.

Origination and servicing costs in the second quarter of 2018 were RMB 147.0 million (US$22.2 million), compared to RMB 93.1 million in the same period last year. Origination and servicing costs in the second quarter of 2018 accounted for 1.3% of amount of loans facilitated, increased from 1.1% in the same period last year mainly due to increased collection efforts this quarter.

General and administrative expenses in the second quarter of 2018 were RMB 336.1 million (US$50.8 million), compared to RMB 98.6 million in the same period last year. General and administrative expenses in the second quarter of 2018 accounted for 22.1% of total net revenue, compared to 8.3% in the same period last year. The increase in general and administrative expenses was mainly due to an expense of RMB 200.0 million (US$30.2 million) related to the quality assurance program; prior to the remaining balance of performing loans facilitated under the Company's quality assurance program being transferred to a third-party guarantee company.

Income tax expense in the second quarter of 2018 was RMB 41.1 million (US$6.2 million). Since the first quarter of 2017, Yi Ren Heng Ye Technology Development (Beijing) Co., Ltd., a subsidiary of the Company, enjoyed a favorable enterprise income tax rate of 12.5% as a software enterprise which qualification was confirmed by local tax bureau in the third quarter of 2016. This makes it eligible for an exemption of enterprise income tax for 2015 and 2016 and a favorable enterprise income tax rate of 12.5% for 2017, 2018 and 2019.

Net income in the second quarter of 2018 was RMB 204.7 million (US$30.9 million), decreased by 24% from RMB269.1 million in the same period last year. 

Adjusted net income (non-GAAP) in the second quarter of 2018 was RMB 440.5 million (US$66.6 million), increased by 64% from RMB 269.1 million in the same period last year. For the second quarter of 2018, net income would by positively impacted by RMB 235.9 million if ASC 606 was not adopted, generated from loans facilitated prior to 2018.

Adjusted EBITDA (non-GAAP) in the second quarter of 2018 was RMB 563.7 million (US$85.2 million), increased by 49% from RMB 378.4 million in the same period last year. Adjusted EBITDA margin[1] (non-GAAP) in the second quarter of 2018 was 37.1%, compared to 32.0% in the same period last year. For the second quarter of 2018, adjusted EBITDA includes RMB 314.5 million adjustment on pre-tax income earned from loans facilitated prior to 2018, if ASC 606 was not adopted.

Basic income per ADS in the second quarter of 2018 was RMB 3.37 (US$0.51), decreased from RMB 4.50 in the same period last year.

Adjusted basic income per ADS in the second quarter of 2018 was RMB 7.26 (US$1.10). Adjusted basic income per ADS includes RMB 235.9 adjustment on income earned from loans facilitated prior to 2018, if ASC 606 was not adopted.

Diluted income per ADS in the second quarter of 2018 was RMB 3.31 (US$0.50), decreased from RMB 4.45 in the same period last year.

Adjusted diluted income per ADS in the second quarter of 2018 was RMB 7.13 (US$1.08). Adjusted diluted income per ADS includes RMB 235.9 adjustment on income earned from loans facilitated prior to 2018, if ASC 606 was not adopted.

Net cash used in operating activities in the second quarter of 2018 was RMB 1,370.1 million (US$207.1 million), compared to net cash generated from operating activities of RMB 530.4 million in the same period last year. The decrease in net cash generated from operating activities is mainly due to an increase in loans with a monthly fee collection schedule as well as increased payouts of principal and accrued interest on default loans from the quality assurance program this quarter.

As of June 30, 2018, cash and cash equivalents was RMB 567.5 million (US$85.8 million), compared to RMB 1,666.9 million as of March 31, 2018. As of June 30, 2018, balance of held-to-maturity investments was RMB 312.1 million (US$47.2 million), compared to RMB 9.7 million as of March 31, 2018. As of June 30, 2018, balance of available-for-sale investments was RMB 530.1 million (US$80.1 million), compared to RMB 990.9 million as of March 31, 2018.

Delinquency rates. As of June 30, 2018, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 0.8%, 1.2% and 1.3%, compared to 0.8%, 1.6% and 1.3%, as of March 31, 2018.

Cumulative M3+ net charge-off rates. As of June 30, 2018, the cumulative M3+ net charge-off rate for loans originated in 2015 was 10.1%, compared to 9.7% as of March 31, 2018. As of June 30, 2018, the cumulative M3+ net charge-off rate for loans originated in 2016 was 8.7%, compared to 7.4% as of March 31, 2018. As of June 30, 2018, the cumulative M3+ net charge-off rate for loans originated in 2017 was 6.0%, compared to 3.0% as of March 31, 2018. As the 2015 and 2016 vintage loans continue to mature, the charge off level is broadly consistent with our risk performance expectation.

Other Operating Metrics and Business Results

  • As of June 30, 2018, remaining principal of performing loans totaled RMB 45.8 billion (US$6.9 billion), increased by 5% from RMB 43.8 billion as of March 31, 2018 and 65% from RMB 27.9 billion as of June 30, 2017.  
  • ŸIn the second quarter of 2018, Grade I, II, III, IV and V loans represented 9.0%, 26.9%, 27.2%, 20.7% and 16.2% of the Company's product portfolio, respectively.

Other Developments

Credit Assurance Program

To ensure compliance with regulatory requirements, starting from May 2018, the Company has discontinued its quality assurance program. Effective May 2018, loans facilitated on the Company's platform will be covered by a new credit assurance program operated by a third-party guarantee company. Under the new credit assurance program, the guarantee company will operate a reserve fund collected from borrowers and will compensate investors for losses from borrower's default up to the cash available in the fund. Additionally, as of May 2018, the Company has transferred the guarantee liability related to the quality assurance program to the guarantee company at the estimated fair value on the date of transfer; therefore the Company derecognized the guarantee liability upon the transfer. The Company's existing liability from quality assurance program has been fully transferred to a credit assurance program set up and managed by a third-party guarantee company. The Company recorded the consideration payable as payable to the guarantee company as of June 30, 2018. The restricted cash was still reported on the Company's balance sheet as of June 30, 2018. As a result of the above, as of June 30, 2018, substantially all outstanding loans facilitated through Yirendai's platform are either covered through a credit enhancement program operated by a third-party guarantee company or PICC's surety insurance program.

Institutional Funding Update

As of August 2018, the Company has entered into new funding arrangements with Goldman Sachs, a leading global investment firm as well as XinWang Bank, one of the three Internet banks in China.

Dividend Policy Update

In August 2018, the Company's board of directors have approved to temporarily suspend the semi-annual dividend policy due to a challenging market environment with business uncertainties.

Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as adjusted net income, adjusted EBITDA, adjusted EBITDA margin, adjusted basic income per ADS and adjusted diluted income per ADS as supplemental measures to review and assess operating performance. We believe these non-GAAP measures provide useful information about our core operating results, enhance the overall understanding of our past performance and prospects and allow for greater visibility with respect to key metrics used by our management in our financial and operational decision-making. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The non-GAAP financial measures have limitations as analytical tools. Other companies, including peer companies in the industry, may calculate these non-GAAP measures differently, which may reduce their usefulness as a comparative measure. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. See "Operating Highlights and Reconciliation of GAAP to Non-GAAP measures" at the end of this press release.

Currency Conversion

This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB 6.6171 to US$1.00, the effective noon buying rate on June 29, 2018 as set forth in the H.10 statistical release of the Federal Reserve Board.

Conference Call

Yirendai's management will host an earnings conference call at 8:00 p.m. U.S. Eastern Time on August 28, 2018 (or 8:00 a.m. Beijing/Hong Kong Time on August 29, 2018.)

Dial-in details for the earnings conference call are as follows:

International:

+65 6713-5090

U.S. Toll Free:

+1 866-519-4004

Hong Kong Toll Free:

800-906-601

Mainland China:

400-620-8038

Conference ID:

9685367

A replay of the conference call may be accessed by phone at the following numbers until September 5, 2018:

International:

+61 2-8199-0299


U.S. Toll Free:

+1 855-452-5696


Conference ID:

9685367


A live and archived webcast of the conference call will be available on Yirendai's website at ir.yirendai.com.

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "confident" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Yirendai's control. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to Yirendai's ability to attract and retain borrowers and investors on its marketplace, its ability to introduce new loan products and platform enhancements, its ability to compete effectively, PRC regulations and policies relating to the peer-to-peer lending service industry in China, general economic conditions in China, and Yirendai's ability to meet the standards necessary to maintain listing of its ADSs on the NYSE or other stock exchange, including its ability to cure any non-compliance with the NYSE's continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in Yirendai's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and Yirendai does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

About Yirendai

Yirendai Ltd. (NYSE: YRD) is a leading fintech company in China connecting investors and individual borrowers. The Company provides an effective solution to address largely underserved investor and individual borrower demand in China through an online platform that automates key aspects of its operations to efficiently match borrowers with investors and execute loan transactions. Yirendai deploys a proprietary risk management system, which enables the Company to effectively assess the creditworthiness of borrowers, appropriately price the risks associated with borrowers, and offer quality loan investment opportunities to investors. Yirendai's online marketplace provides borrowers with quick and convenient access to consumer credit at competitive prices and investors with easy and quick access to an alternative asset class with attractive returns. For more information, please visit ir.yirendai.com.

For investor and media inquiries, please contact:

Yirendai
Hui (Matthew) Li
Director of Investor Relations
Email: ir@yirendai.com

 


[1] Adjusted EBITDA margin is a non-GAAP financial measure calculated as adjusted EBITDA divided by total net revenue.

 

 

Unaudited Condensed Consolidated Statements of Operations

 (in thousands, except for share, per share and per ADS data, and percentages)



For the Three Months Ended 


For the Six Months Ended 


June 30, 
2017


March 31, 
2018


June 30, 
2018


June 30, 
2018


June 30, 
2017


June 30, 
2018


June 30, 
2018


RMB


RMB
(Revised*)


RMB


USD


RMB


RMB


USD

Net revenue:














Loan facilitation services

1,121,200


1,247,616


997,450


150,736


2,097,598


2,245,066


339,283

Post-origination services

41,389


53,405


61,673


9,320


74,701


115,078


17,391

Account management services

-


361,121


401,960


60,746


-


763,081


115,320

Others

20,468


47,173


58,489


8,839


32,357


105,662


15,968

Total net revenue *

1,183,057


1,709,315


1,519,572


229,641


2,204,656


3,228,887


487,962

Operating costs and expenses:














Sales and marketing

617,880


781,726


793,750


119,954


1,087,260


1,575,476


238,092

Origination and servicing

93,147


142,740


147,031


22,220


151,931


289,771


43,791

General and administrative

98,614


338,030


336,062


50,787


199,112


674,092


101,871

Total operating costs and expenses

809,641


1,262,496


1,276,843


192,961


1,438,303


2,539,339


383,754

Interest income

27,398


28,276


23,409


3,538


51,547


51,685


7,811

Fair value adjustments related to Consolidated ABFE

(1,915)


4,463


142,603


21,551


(560)


147,066


22,225

Provision expenses *

-


(116,624)


(163,029)


(24,637)


-


(279,653)


(42,262)

Non-operating income, net

555


(452)


5


1


762


(447)


(68)

Income before provision for income taxes

399,454


362,482


245,717


37,133


818,102


608,199


91,914

Income tax expense/(benefit)

130,358


83,578


41,054


6,204


198,105


124,632


18,836

Net income

269,096


278,904


204,663


30,929


619,997


483,567


73,078















Weighted average number of ordinary shares outstanding, basic

119,603,286


121,368,093


121,429,290


121,429,290


119,582,176


121,397,446


121,397,446

Basic income per share

2.2499


2.2980


1.6855


0.2547


5.1847


3.9833


0.6020

Basic income per ADS

4.4998


4.5960


3.3710


0.5094


10.3694


7.9666


1.2040















Weighted average number of ordinary shares outstanding, diluted

120,833,406


123,773,063


123,656,710


123,656,710


120,837,995


123,713,641


123,713,641

Diluted income per share

2.2270


2.2533


1.6551


0.2501


5.1308


3.9088


0.5907

Diluted income per ADS

4.4540


4.5066


3.3102


0.5002


10.2616


7.8176


1.1814















Unaudited Condensed Consolidated Cash Flow Data














Net cash generated from/(used in) operating activities

530,371


(337,727)


(1,370,147)


(207,062)


1,094,875


(1,707,874)


(258,101)

Net cash used in investing activities

(95,702)


(382,191)


(491,870)


(74,333)


(523,388)


(874,061)


(132,091)

Net cash (used in)/provided by financing activities

(94,993)


(45,176)


197,184


29,799


(139,834)


152,008


22,972

Effect of foreign exchange rate changes

(6,463)


(10,976)


8,117


1,227


(10,242)


(2,859)


(432)

Net increase/(decrease) in cash, cash equivalents and restricted cash

333,213


(776,070)


(1,656,716)


(250,369)


421,411


(2,432,786)


(367,652)

Cash, cash equivalents and restricted cash, beginning of period

2,274,709


3,662,868


2,886,798


436,263


2,186,511


3,662,868


553,546

Cash, cash equivalents and restricted cash, end of period

2,607,922


2,886,798


1,230,082


185,894


2,607,922


1,230,082


185,894

 

 

 

Unaudited Consolidated Balance Sheet

 (in thousands)


As of


June 30, 
2017


March 31, 
2018


June 30, 
2018


June 30, 
2018


RMB


RMB
(Revised*)


RMB


USD









        Cash and cash equivalents

891,154


1,666,866


567,502


85,762

        Restricted cash

1,716,768


1,219,932


662,580


100,132

        Accounts receivable

18,109


10,956


6,856


1,036

        Prepaid expenses and other assets

619,504


1,191,191


1,228,150


185,603

        Loans at fair value

269,952


888,786


1,659,310


250,761

        Amounts due from related parties

2,824


129,229


119,616


18,077

        Held-to-maturity investments

589,329


9,679


312,101


47,166

        Available-for-sale investments

1,262,260


990,873


530,057


80,104

        Property, equipment and software, net

59,838


83,279


96,769


14,624

        Deferred tax assets *

559,794


806,798


429,964


64,978

        Contract assets, net*

-


2,410,688


2,552,900


385,803

Total assets

5,989,532


9,408,277


8,165,805


1,234,046

        Accounts payable

15,153


35,747


36,657


5,540

        Amounts due to related parties

45,425


70,875


54,954


8,305

        Liabilities from quality assurance program and guarantee

1,961,315


2,745,530


12,152


1,836

        Deferred revenue

173,386


-


-


-

        Payable to third-party credit assurance program

-


-


1,241,859


187,674

        Payable to investors at fair value

200,947


75,983


51,988


7,857

        Accrued expenses and other liabilities *

780,555


1,170,206


1,234,407


186,548

        Deferred tax liabilities *

60,000


627,321


658,156


99,463

        Contract liabilities *

-


334,658


294,680


44,533

Total liabilities

3,236,781


5,060,320


3,584,853


541,756

        Ordinary shares

75


76


76


11

        Additional paid-in capital

950,151


1,149,698


1,174,158


177,443

        Accumulated other comprehensive income/(loss)

19,216


(1,502)


9,005


1,361

        Retained earnings*

1,783,309


3,199,685


3,397,713


513,475

Total equity

2,752,751


4,347,957


4,580,952


692,290

Total liabilities and equity

5,989,532


9,408,277


8,165,805


1,234,046

 

 

 

Operating Highlights and Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except for number of  borrowers, number of investors and percentages)


For the Three Months Ended 


For the Six Months Ended


June 30, 
2017


March 31, 
2018


June 30, 
2018


June 30, 
2018


June 30, 
2017


June 30, 
2018


June 30, 
2018


RMB


RMB
(Revised*)


RMB


USD


RMB


RMB


USD

Operating Highlights














Amount of loans facilitated

8,536,087


11,956,720


11,736,216


1,773,620


15,782,171


23,692,936


3,580,562

        Loans generated from online channels

4,271,610


6,940,343


7,608,411


1,149,811


7,861,739


14,548,754


2,198,660

        Loans generated from offline channels

4,264,477


5,016,377


4,127,805


623,809


7,920,432


9,144,182


1,381,902

Number of borrowers

138,529


174,128


177,754


177,754


263,319


351,725


351,725

        Borrowers from online channels

98,245


126,276


135,686


135,686


184,190


261,814


261,814

        Borrowers from offline channels

40,284


47,852


42,068


42,068


79,129


89,911


89,911

Number of investors

199,591


214,231


202,380


202,380


324,672


349,526


349,526

        Investors from online channels

199,591


214,231


202,380


202,380


324,672


349,526


349,526















Reconciliation of Net Income














Net income

269,096


278,904


204,663


30,929


619,997


483,567


73,078

Adjustments on net income generated from loans pre-2018 (before adopting ASC606) *

-


249,422


235,877


35,647


-


485,299


73,340

Adjusted net income

269,096


528,326


440,540


66,576


619,997


968,866


146,418















Reconciliation of EBITDA














Net income

269,096


278,904


204,663


30,929


619,997


483,567


73,078

Adjustments on income before income taxes, generated from loans pre-2018 (before adopting ASC606) *

-


332,563


314,503


47,529


-


647,066


97,787

Interest income

(27,398)


(28,276)


(23,409)


(3,538)


(51,547)


(51,685)


(7,811)

Income tax expense

130,358


83,578


41,054


6,204


198,105


124,632


18,836

Depreciation and amortization

4,923


8,500


9,119


1,378


9,099


17,619


2,663

Share-based compensation

1,455


17,574


17,791


2,689


3,077


35,365


5,344

Adjusted EBITDA *

378,434


692,843


563,721


85,191


778,731


1,256,564


189,897

Adjusted EBITDA margin *

32.0%


40.5%


37.1%


37.1%


35.3%


38.9%


38.9%















* Please refer to accounting policy change disclosed above.






 

 

Operating Highlights

(in thousands)


As of


June 30, 
2017


March 31, 
2018


June 30, 
2018


June 30, 
2018


RMB


RMB


RMB


USD

Operating Highlights








Remaining principal of performing loans

27,871,922


43,843,775


45,849,674


6,928,968

Remaining principal of performing loans covered by quality assurance program and guarantee

27,502,314


40,855,141


148,523


22,445

Remaining principal of performing loans covered by third-party credit assurance program

-


-


42,149,174


6,369,735

 

 

 

Delinquency Rates


Delinquent for


15-29 days


30-59 days


60-89 days

All Loans






December 31, 2013

0.2%


0.4%


0.3%

December 31, 2014

0.3%


0.2%


0.2%

December 31, 2015

0.4%


0.5%


0.4%

December 31, 2016

0.4%


0.7%


0.6%

December 31, 2017

0.8%


0.9%


0.7%

March 31, 2018

0.8%


1.6%


1.3%

June 30, 2018

0.8%


1.2%


1.3%







Online Channels






December 31, 2013

0.1%


0.9%


0.3%

December 31, 2014

0.4%


0.3%


0.2%

December 31, 2015

0.6%


0.8%


0.6%

December 31, 2016

0.6%


1.0%


0.8%

December 31, 2017

1.2%


1.2%


0.9%

March 31, 2018

1.0%


2.2%


1.8%

June 30, 2018

0.9%


1.5%


1.6%







Offline Channels






December 31, 2013

0.3%


0.2%


0.2%

December 31, 2014

0.3%


0.2%


0.2%

December 31, 2015

0.3%


0.4%


0.3%

December 31, 2016

0.4%


0.6%


0.4%

December 31, 2017

0.5%


0.7%


0.5%

March 31, 2018

0.6%


1.1%


0.8%

June 30, 2018

0.7%


1.0%


1.0%

 

 

 

Net Charge-Off Rate for Upgraded Risk Grid

Loan issued period


Customer grade


Amount of loans facilitated 
during the period


Accumulated M3+ Net Charge-Off 
as of June 30, 2018


Total Net Charge-Off Rate 
as of June 30, 2018





(in RMB thousands)


(in RMB thousands)



2014


I


-


-


-



II


1,921,372


85,697


4.5%



III


303,276


19,295


6.4%



IV


-


-


-



V


3,913


518


13.2%



Total


2,228,561


105,510


4.7%

2015


I


146,490


4,254


2.9%



II


1,614,354


94,718


5.9%



III


2,521,705


210,958


8.4%



IV


2,506,107


264,606


10.6%



V


2,768,957


389,048


14.1%



Total


9,557,613


963,584


10.1%

2016


I


497,220


14,806


3.0%



II


3,137,889


127,756


4.1%



III


3,763,081


217,374


5.8%



IV


5,183,233


394,979


7.6%



V


7,799,180


1,025,257


13.1%



Total


20,380,603


1,780,172


8.7%

2017


I


2,701,162


48,174


1.8%



II


9,079,647


358,000


3.9%



III


10,611,451


633,448


6.0%



IV


10,263,135


707,636


6.9%



V


8,750,663


745,081


8.5%



Total


41,406,058


2,492,339


6.0%

1H 2018


I


2,118,371


2,080


0.1%



II


6,186,170


18,023


0.3%



III


6,242,087


20,918


0.3%



IV


5,780,058


20,785


0.4%



V


3,366,250


14,766


0.4%



Total


23,692,936


76,572


0.3%

 

 

 

M3+ Net Charge-Off Rate

Loan 
issued 
period


Month on Book



4

7

10

13

16

19

22

25

28

31

34

2013Q1


1.9%

3.2%

3.1%

2.3%

2.0%

0.9%

0.5%

0.5%

0.4%

0.4%

0.4%

2013Q2


1.8%

3.6%

4.5%

5.9%

6.4%

7.4%

6.1%

7.0%

7.5%

7.5%

7.8%

2013Q3


0.5%

2.8%

4.2%

5.5%

6.1%

6.5%

7.1%

7.1%

7.0%

6.9%

6.9%

2013Q4


0.7%

3.4%

4.8%

6.2%

6.8%

7.5%

8.3%

8.3%

8.2%

8.5%

8.3%

2014Q1


1.0%

4.2%

6.1%

7.0%

8.4%

9.3%

9.8%

9.7%

9.9%

9.8%

9.5%

2014Q2


0.5%

1.8%

2.6%

3.8%

4.3%

4.6%

4.6%

4.7%

4.7%

4.7%

4.8%

2014Q3


0.2%

0.8%

2.0%

2.8%

3.3%

3.7%

4.0%

4.2%

4.2%

4.1%

4.1%

2014Q4


0.3%

1.5%

2.7%

3.5%

4.1%

4.6%

5.1%

5.2%

5.2%

5.3%

5.3%

2015Q1


0.6%

2.7%

4.4%

5.8%

7.1%

8.2%

9.1%

9.6%

9.9%

10.2%

10.3%

2015Q2


0.5%

2.1%

3.7%

5.3%

6.6%

7.7%

8.6%

9.2%

9.6%

9.8%

10.1%

2015Q3


0.2%

1.6%

3.4%

4.9%

6.4%

7.4%

8.1%

8.6%

9.1%

9.5%


2015Q4


0.2%

1.6%

3.2%

4.9%

6.2%

7.2%

8.0%

8.7%

9.4%



2016Q1


0.2%

1.3%

2.9%

4.3%

5.4%

6.4%

7.2%

8.1%




2016Q2


0.2%

1.7%

3.4%

4.9%

6.1%

7.1%

8.3%





2016Q3


0.1%

1.5%

3.2%

4.6%

6.0%

7.5%






2016Q4


0.2%

1.5%

3.0%

4.6%

6.4%







2017Q1


0.2%

1.4%

3.2%

5.4%








2017Q2


0.3%

2.0%

4.7%









2017Q3


0.4%

3.0%










2017Q4


0.6%











 

 



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