Mixed results for consumer finance firms 
2019-08-29
First-half results were mixed for the 11 licensed consumer finance companies which have posted their half-year financial reports so far.
Profitability in the sector will face growing pressure as the costs of finding new customers and raising capital to keep increasing.
Merchants Union Consumer Finance Co, a wholly-owned subsidiary of China Merchants Bank and China Unicom, made 4.6 billion yuan (US$640 million) in the first half in 2019, up 51.5 percent year on year. 
Its net profit grew by 17.5 percent to reach 710 million yuan.
That was followed by Industrial Consumer Finance Co with a profit of 442 million yuan and Mashang Consumer Finance Co, which earned 301 million yuan from January to June. Two of the first four consumer finance companies, established in 2009, Bank of Beijing Consumer Finance with 30 million yuan and Jincheng Consumer Finance with 80 million yuan did less well. 
A relatively new entrant to the sector, Hunan Changyin 58 Consumer Finance, incorporated in 2017, registered an operating income of 199 million yuan and a net loss of 43 million yuan.
Competition in the sector is intense and traditional consumer finance firms will face great challenges as commercial banks and online interests gain advantages in the lucrative market, said analysts.
On the other hand, factors like the rising cost of customer and capital acquisition, as well as demand for risk management, will continue to weigh on all market participants.
