U.S. markets close in 2 hours 7 minutes
  • S&P 500

    4,249.31
    -5.84 (-0.14%)
     
  • Dow 30

    34,312.20
    -81.55 (-0.24%)
     
  • Nasdaq

    14,088.52
    -85.62 (-0.60%)
     
  • Russell 2000

    2,317.78
    -8.36 (-0.36%)
     
  • Crude Oil

    71.96
    +1.08 (+1.52%)
     
  • Gold

    1,856.80
    -9.10 (-0.49%)
     
  • Silver

    27.71
    -0.33 (-1.17%)
     
  • EUR/USD

    1.2130
    +0.0007 (+0.06%)
     
  • 10-Yr Bond

    1.5040
    +0.0030 (+0.20%)
     
  • GBP/USD

    1.4082
    -0.0026 (-0.18%)
     
  • USD/JPY

    110.0780
    +0.0170 (+0.02%)
     
  • BTC-USD

    40,410.31
    +212.32 (+0.53%)
     
  • CMC Crypto 200

    1,005.13
    -5.48 (-0.54%)
     
  • FTSE 100

    7,172.48
    +25.80 (+0.36%)
     
  • Nikkei 225

    29,441.30
    +279.50 (+0.96%)
     

Yiren Digital Reports Third Quarter 2019 Financial Results

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

BEIJING, Nov. 14, 2019 (GLOBE NEWSWIRE) -- Yiren Digital Ltd. (YRD) (“Yiren Digital” or the “Company”), a leading fintech company in China, today announced its unaudited financial results for the third quarter ended September 30, 2019.

Third Quarter 2019 Operational Highlights
Wealth Management—Yiren Wealth

  • Cumulative number of investors served reached 2,200, 223, representing an increase of 0.7% from 2,185,513 in the second quarter of 2019 and compared to 2,042,607 in the third quarter of 2018.

  • Number of active investors in the third quarter of 2019 was 586,333, representing a decrease of 13% from 671,957 in the second quarter of 2019.

  • Total assets under management (“AUM”) for Yiren Wealth’s P2P products was RMB 40,191.7 million (US$ 5,623.0 million) as of September 30, 2019, representing a decrease of 7% from RMB 43,249.9 million as of June 30, 2019. Average AUM per investor reached RMB 152,289 (US$ 21,306) as of September 30, 2019, representing an increase of 1% from RMB 151,378 as of June 30, 2019.

  • Total assets under administration (“AUA”) of non-P2P products amounted to RMB 767.2 million (US$ 107.3 million) in the third quarter of 2019, representing an increase of 169% from RMB 284.8 million in the second quarter of 2019. Total AUM of non-P2P products was RMB 645.9 million (US$90.4 million) as of September 30, 2019, representing an increase of 80% from RMB 358.6 million as of June 30, 2019. Non-P2P products include bank’s wealth management products, mutual funds and insurance.

  • Number of non-P2P investors was 19,496 as of September 30, 2019, representing an increase of 14% from 17,133 as of June 30, 2019.

Consumer Credit—Yiren Credit

  • Total loan originations in the third quarter of 2019 reached RMB 10.5 billion (US$1.5 billion), representing an increase of 9% from RMB 9.7 billion in the second quarter of 2019 and compared to RMB 11.8 billion in the third quarter of 2018.

  • Cumulative number of borrowers served reached 4,593,590, representing an increase of 2% from 4,491,761 in the second quarter of 2019 and compared to 4,161,600 in the third quarter of 2018.

  • Number of borrowers in the third quarter of 2019 was 150,280, representing an increase of 11% from 135,246 in the second quarter of 2019 and compared to 174,630 in the third quarter of 2018.

  • The percentage of loan volume generated by repeat borrowers was 34.0 % in the third quarter of 2019.

  • 45.7% of loan originations were generated online in the third quarter of 2019.

  • Total outstanding principal balance of performing loans reached RMB 54,553.7 million (US$7,632.3 million) as of September 30, 2019, representing a decrease of 6% from RMB 58,071.3 million as of June 30, 2019.

“We are pleased to deliver solid performance this quarter amidst a tightening regulatory environment, as highlighted by a 48% increase in net profit to RMB 228.0 million from RMB 154.5 million in the previous quarter, a sign of improvement in our business fundamentals and operating efficiency resulted from the synergies of our business re-alignments,” said Mr. Ning Tang, Chairman and Chief Executive Officer of Yiren Digital. “Looking forward, we will stay focused on driving our credit business and enhancing shareholder value by expanding our product portfolio, achieving further diversification in funding sources and seeking new marketing channels. On wealth management, we rolled out online financial advisory services to selected clients in the third quarter of 2019 and we will continue to focus on building up our investor’s investment portfolio in non-p2p wealth management products.”

“We resumed loan origination growth this quarter with loan volume increasing to RMB 10.5 billion, representing a 9% growth quarter over quarter,” said Mr. Dennis Cong, Senior VP of Yiren Digital. “Our balance sheet remained strong with approximately RMB 3.0 billion of cash and short-term liquidity. In particular, we also generated a positive net cash flow from operating activities of RMB 808.1 million this quarter, indicating a resilient and profitable business model. On institutional funding, we want to highlight that we have increased the line of facility from our institutional partners to RMB 35.0 billion in the third quarter of 2019 from RMB 30.0 billion in the second quarter of 2019.”

“On credit performance and risk management, we are seeing promising improvements in early delinquencies this quarter indicating an enhanced asset quality” said Mr. Huan Chen, Chief Risk Officer of Yiren Digital. “Despite industry uncertainties our early conservative credit policy adjustment has shown improving trends and we are working with regulators in connecting our data to PBOC.”

Third Quarter 2019 Financial Results

Total amount of loans facilitated in the third quarter of 2019 was RMB 10,496.3 million (US$1,468.5 million), compared to RMB 11,781.9 million in the same period last year. As of September 30, 2019, the total outstanding principal amount of the performing loans was RMB 54.6 billion (US$7.6 billion), decreased by 6% from RMB 58.1 billion as of June 30, 2019.

Total net revenue in the third quarter of 2019 was RMB 2,056.1 million (US$287.7 million), compared to RMB 2,187.6 million in the same period last year. Revenue from Yiren Credit reached RMB 1,515.5 million (US$ 212.1 million), representing a decrease of 8% from RMB 1,643.8 million in the third quarter of 2018. Revenue from Yiren Wealth reached RMB 540.6 million (US$75.6 million), representing a decrease of 1% from RMB 543.8 million in the third quarter of 2018.

Sales and marketing expenses in the third quarter of 2019 were RMB 1,160.4 million (US$162.3 million), compared to RMB 1,449.6 million in the same period last year. Sales and marketing expenses in the third quarter of 2019 accounted for 11.1% of the total amount of loans facilitated, as compared to 12.3% in the same period last year mainly due to an increase in customer acquisition and as well as operating efficiencies.

Origination and servicing costs in the third quarter of 2019 were RMB 156.1 million (US$21.8 million), compared to RMB 262.1 million in the same period last year. Origination and servicing costs in the third quarter of 2019 accounted for 1.5% of the total amount of loans facilitated, compared to 2.2% in the same period last year.

General and administrative expenses in the third quarter of 2019 were RMB 168.1 million (US$23.5 million), compared to RMB 367.9 million in the same period last year. General and administrative expenses in the third quarter of 2019 accounted for 8.2% of the total net revenue, compared to 16.8% in the same period last year.

Allowance for contract assets in the third quarter of 2019 were RMB 344.7 million (US$48.2 million), compared to RMB 272.9 million in the same period last year. The increase was mainly attributable to changes in future collectability estimates.

Income tax expense in the third quarter of 2019 was RMB 19.9 million (US$2.8 million).

Net income in the third quarter of 2019 was RMB 228.0 million (US$31.9 million), compared to a net loss of RMB 135.8 million in the same period last year.

Adjusted EBITDA (non-GAAP) in the third quarter of 2019 was RMB 274.2 million (US$38.4 million), compared to an adjusted EBITDA loss of RMB 12.3 million in the same period last year. Adjusted EBITDA margin1 (non-GAAP) in the third quarter of 2019 was 13.3%, compared to -0.6% in the same period last year.

Basic income per ADS in the third quarter of 2019 was RMB 2.46 (US$0.34), compared to a basic loss per ADS of RMB 1.47 in the same period last year.

Diluted income per ADS in the third quarter of 2019 was RMB 2.45 (US$0.34), compared to a diluted loss per ADS of RMB 1.47 in the same period last year.

Net cash generated from operating activities in the third quarter of 2019 was RMB 808.1 million (US$113.1 million), compared to RMB 216.9 million in the same period last year.

Net cash used in investing activities in the third quarter of 2019 was RMB 924.1 million (US$129.3 million) which includes a payment of RMB 846.0 million made to CreditEase as part of the contingent consideration for the business realignment.

As of September 30, 2019, cash and cash equivalents was RMB 2,633.0 million (US$368.4 million), compared to RMB 2,706.5 million as of June 30, 2019. As of September 30, 2019, the balance of held-to-maturity investments was RMB 8.1 million (US$1.1 million), compared to RMB 9.5 million as of June 30, 2019. As of September 30, 2019, the balance of available-for-sale investments was RMB 426.3 million (US$59.6 million), compared to RMB 387.5 million as of June 30, 2019.

Delinquency rates. As of September 30, 2019, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 1.0%, 1.8%, and 1.6%, respectively compared to 1.1%, 1.8%, and 1.9%,as of June 30, 2019.

Cumulative M3+ net charge-off rates. As of September 30, 2019, the cumulative M3+ net charge-off rate for loans originated in 2016 was 9.4%, compared to 9.2% as of June 30, 2019. As of September 30, 2019, the cumulative M3+ net charge-off rate for loans originated in 2017 was 15.3%, compared to 14.0% as of June 30, 2019. As of September 30, 2019, the cumulative M3+ net charge-off rate for loans originated in 2018 was 11.6%, compared to 8.7% as of June 30, 2019.

Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as adjusted EBITDA and adjusted EBITDA margin 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 7.1477 to US$1.00, the effective noon buying rate on September 30, 2019, as set forth in the H.10 statistical release of the Federal Reserve Board.

Conference Call
Yiren Digital’s management will host an earnings conference call at 7:00 p.m. U.S. Eastern Time on November 14, 2019, (or 8:00 a.m. Beijing/Hong Kong Time on November 15, 2019).

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

International:

+65 6713-5091

U.S. Toll Free:

+1 866-519-4004

Hong Kong Toll Free:

800-906-601

China Toll Free:

400-620-8038

Conference ID:

9299687

A replay of the conference call may be accessed by phone at the following numbers until November 22, 2019:

International:

+61 2-8199-0299

U.S. Toll Free:

+1 646-254-3697

Replay Access Code:

9299687

Additionally, a live and archived webcast of the conference call will be available 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 Yiren Digital’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 Yiren Digital’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 Yiren Digital’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 Yiren Digital’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 Yiren Digital 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 Yiren Digital
Yiren Digital Ltd. (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 online and offline channels to efficiently match borrowers with investors and execute loan transactions. Yiren Digital 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. Yiren Digital’s 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:
Yiren Digital
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 Nine Months Ended

September 30, 2018

June 30,
2019

September 30, 2019

September 30, 2019

September 30, 2018

September 30, 2019

September 30, 2019

RMB (Recast*)

RMB

RMB

USD

RMB (Recast*)

RMB

USD

Net revenue:

Loan facilitation services

1,251,834

1,237,718

1,286,923

180,047

6,303,575

3,579,687

500,817

Post-origination services

269,874

241,321

103,073

14,420

854,749

640,673

89,633

Account management services

508,625

549,024

489,673

68,508

1,302,170

1,527,037

213,640

Others

157,301

188,577

176,439

24,685

479,095

505,759

70,758

Total net revenue

2,187,634

2,216,640

2,056,108

287,660

8,939,589

6,253,156

874,848

Operating costs and expenses:

Sales and marketing

1,449,556

1,208,647

1,160,365

162,341

5,421,523

3,496,957

489,241

Origination and servicing

262,050

162,945

156,073

21,835

834,187

491,141

68,713

General and administrative

367,894

175,534

168,092

23,517

1,394,173

601,333

84,130

Allowance for contract assets and receivables

272,889

500,861

344,742

48,231

783,596

1,036,707

145,041

Total operating costs and expenses

2,352,389

2,047,987

1,829,272

255,924

8,433,479

5,626,138

787,125

Other income/(expenses):

Interest income, net

8,440

25,213

13,825

1,934

58,088

62,913

8,802

Fair value adjustments related to Consolidated ABFE

55,658

5,787

(1,323

)

(185

)

203,278

39,462

5,521

Others, net

1,089

17,480

7,112

995

(5,834

)

184,815

25,857

Total other income

65,187

48,480

19,614

2,744

255,532

287,190

40,180

Income before provision for income taxes

(99,568

)

217,133

246,450

34,480

761,642

914,208

127,903

Share of results of equity investees

(917

)

(816

)

1,505

211

(5,946

)

(4,268

)

(597

)

Income tax expense

35,307

61,856

19,924

2,788

161,802

158,314

22,149

Net income

(135,792

)

154,461

228,031

31,903

593,894

751,626

105,157

Weighted average number of ordinary shares outstanding, basic

185,024,291

184,608,337

185,548,214

185,548,214

183,933,356

185,095,873

185,095,873

Basic income per share

(0.7339

)

0.8367

1.2290

0.1719

3.2289

4.0607

0.5681

Basic income per ADS

(1.4678

)

1.6734

2.4580

0.3438

6.4578

8.1214

1.1362

Weighted average number of ordinary shares outstanding, diluted

185,024,291

186,667,233

186,351,678

186,351,678

186,088,414

186,433,058

186,433,058

Diluted income per share

(0.7339

)

0.8275

1.2237

0.1712

3.1915

4.0316

0.5640

Diluted income per ADS

(1.4678

)

1.6550

2.4474

0.3424

6.3830

8.0632

1.1280

Unaudited Condensed Consolidated Cash Flow Data (Recast**)

Net cash generated from/ (used in) operating activities

216,874

36,352

808,148

113,064

(2,505,496

)

186,065

26,032

Net cash provided by/ (used in) investing activities

2,220,043

240,896

(924,146

)

(129,293

)

2,426,607

(933,181

)

(130,557

)

Net cash (used in)/ provided by financing activities

(2,307,038

)

(73,385

)

6,886

963

(2,272,048

)

426,890

59,724

Effect of foreign exchange rate changes

(119,172

)

1,532

3,193

448

(122,031

)

2,529

354

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

10,707

205,395

(105,919

)

(14,818

)

(2,472,968

)

(317,697

)

(44,447

)

Cash, cash equivalents and restricted cash, beginning of period

1,996,647

2,617,311

2,822,706

394,911

4,480,322

3,034,484

424,540

Cash, cash equivalents and restricted cash, end of period

2,007,354

2,822,706

2,716,787

380,093

2,007,354

2,716,787

-

380,093


Unaudited Condensed Consolidated Balance Sheets

(in thousands)

As of

December 31,
2018

June 30,
2019

September 30,
2019

September 30,
2019

RMB (Recast*)

RMB

RMB

USD

Cash and cash equivalents

2,606,939

2,706,530

2,632,952

368,364

Restricted cash

427,546

116,176

83,835

11,729

Accounts receivable

40,326

27,212

67,231

9,406

Contract assets, net

3,909,263

2,958,476

2,598,202

363,502

Contract cost

145,460

141,480

143,066

20,016

Prepaid expenses and other assets

2,552,319

1,142,757

1,280,784

179,188

Loans at fair value

1,375,221

677,354

552,648

77,318

Financing receivables

-

25,175

24,630

3,446

Amounts due from related parties

1,361,805

1,791,515

1,678,499

234,831

Held-to-maturity investments

329,597

9,542

8,051

1,126

Available-for-sale investments

835,565

387,519

426,321

59,644

Long term investments

217,636

143,047

144,552

20,224

Property, equipment and software, net

266,002

230,078

213,962

29,934

Deferred tax assets

184,136

149,269

150,363

21,037

Right-of-use assets

-

398,154

383,545

53,660

Total assets

14,251,815

10,904,284

10,388,641

1,453,425

Accounts payable

307,046

54,158

62,313

8,718

Amounts due to related parties

8,276,459

169,189

289,820

40,547

Liabilities from quality assurance program and guarantee

9,950

6,539

5,644

790

Deferred revenue

569,469

390,621

381,899

53,430

Payable to investors at fair value

626,207

-

-

-

Accrued expenses and other liabilities

2,193,576

2,265,288

2,351,078

328,928

Refund liability

2,145,748

2,039,998

2,002,785

280,200

Deferred tax liabilities

486,773

329,347

267,647

37,445

Lease liabilities

-

341,364

322,832

45,166

Contingent consideration

-

2,626,734

1,780,734

249,134

Total liabilities

14,615,228

8,223,238

7,464,752

1,044,358

Ordinary shares

77

77

121

17

Shares to be issued

-

2,754,444

-

-

Additional paid-in capital

1,293,968

1,106,153

3,872,219

541,743

Treasury stock

(254

)

(37,097

)

(37,097

)

(5,190

)

Accumulated other comprehensive income

16,390

18,367

25,225

3,529

Accumulated deficit

(1,673,594

)

(1,160,898

)

(936,579

)

(131,032

)

Total (deficit)/ equity

(363,413

)

2,681,046

2,923,889

-

409,067

Total liabilities and equity

14,251,815

10,904,284

10,388,641

-

1,453,425


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 Nine Months Ended

September 30,
2018

June 30,
2019

September 30,
2019

September 30,
2019

September 30,
2018

September 30,
2019

September 30,
2019

RMB (Recast*)

RMB

RMB

USD

RMB (Recast*)

RMB

USD

Operating Highlights

Amount of investment

18,235,782

11,939,582

9,037,670

1,264,417

53,890,936

32,412,841

4,534,723

AUM of investment

71,950,315

64,476,635

59,792,510

8,365,280

71,950,315

59,792,510

8,365,280

Number of investors

257,159

157,973

113,955

113,955

647,024

319,538

319,538

Amount of loans facilitated

11,781,947

9,673,818

10,496,261

1,468,481

49,733,287

31,105,001

4,351,750

Number of borrowers

174,630

135,246

150,280

150,280

726,917

423,414

423,414

Remaining principal of performing loans

71,625,593

58,071,303

54,553,702

7,632,343

71,625,593

54,553,702

7,632,343

Segment Information

Wealth management:

Revenue

543,857

592,378

540,554

75,626

1,498,458

1,654,366

231,454

Sales and marketing expenses

220,561

213,168

219,390

30,694

1,169,242

576,462

80,650

Consumer credit:

Revenue

1,643,777

1,624,262

1,515,554

212,034

7,441,131

4,598,790

643,394

Sales and marketing expenses

1,228,995

995,479

940,975

131,647

4,252,281

2,920,495

408,591

Reconciliation of Adjusted EBITDA

Net income

(135,792

)

154,461

228,031

31,903

593,894

751,626

105,157

Interest income, net

(8,440

)

(25,213

)

(13,825

)

(1,934

)

(58,088

)

(62,913

)

(8,802

)

Income tax expense

35,307

61,856

19,924

2,788

161,802

158,314

22,149

Depreciation and amortization

35,959

31,112

32,153

4,498

111,356

95,767

13,398

Share-based compensation

60,632

17,732

7,954

1,113

99,931

40,385

5,650

Adjusted EBITDA

(12,334

)

239,948

274,237

38,368

908,895

983,179

137,552

Adjusted EBITDA margin

-0.6

%

10.8

%

13.3

%

13.3

%

10.2

%

15.7

%

15.7

%

* Prior period financials have been recasted to reflect the acquisition from CreditEase under common control.

**The Company reclassified 368.2 million payments made in the second quarter of 2019 related to future acquisitions from cash used in operating activities to cash used in investing activities.


Delinquency Rates

Delinquent for

15-29 days

30-59 days

60-89 days

All Loans

December 31, 2015

0.7

%

1.2

%

1.0

%

December 31, 2016

0.6

%

0.9

%

0.8

%

December 31, 2017

0.8

%

1.0

%

0.8

%

December 31, 2018

1.0

%

1.8

%

1.7

%

March 31, 2019

0.9

%

1.9

%

1.7

%

June 30, 2019

1.1

%

1.8

%

1.9

%

September 30, 2019

1.0

%

1.8

%

1.6

%

Online Channels

December 31, 2015

0.5

%

0.8

%

0.6

%

December 31, 2016

0.5

%

0.9

%

0.8

%

December 31, 2017

1.1

%

1.1

%

0.9

%

December 31, 2018

1.2

%

2.3

%

2.2

%

March 31, 2019

1.2

%

2.6

%

2.4

%

June 30, 2019

1.4

%

2.2

%

2.6

%

September 30, 2019

1.3

%

2.4

%

2.3

%

Offline Channels

December 31, 2015

0.7

%

1.2

%

1.0

%

December 31, 2016

0.6

%

0.9

%

0.8

%

December 31, 2017

0.6

%

0.9

%

0.7

%

December 31, 2018

0.9

%

1.6

%

1.5

%

March 31, 2019

0.8

%

1.6

%

1.5

%

June 30, 2019

1.0

%

1.6

%

1.7

%

September 30, 2019

0.9

%

1.5

%

1.4

%


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 September 30, 2019*

Total Net Charge-Off Rate
as of September 30, 2019*

(in RMB thousands)

(in RMB thousands)

2015

I

4,894,936

201,064

4.1

%

II

14,492,035

486,144

3.4

%

III

11,272,838

711,683

6.3

%

IV

11,283,656

1,357,155

12.0

%

V

11,199,563

1,718,367

15.3

%

Total

53,143,029

4,474,413

8.4

%

2016

I

5,858,273

234,148

4.0

%

II

12,360,346

532,664

4.3

%

III

9,951,614

749,365

7.5

%

IV

8,652,543

922,419

10.7

%

V

16,982,336

2,603,436

15.3

%

Total

53,805,112

5,042,032

9.4

%

2017

I

10,431,218

670,341

6.4

%

II

12,270,230

1,507,339

12.3

%

III

13,837,922

2,183,484

15.8

%

IV

13,663,558

2,356,569

17.2

%

V

19,680,365

3,968,677

20.2

%

Total

69,883,293

10,686,410

15.3

%

2018

I

9,451,125

486,383

5.1

%

II

14,656,758

1,338,476

9.1

%

III

13,903,217

1,624,453

11.7

%

IV

13,812,989

1,961,234

14.2

%

V

11,326,230

1,886,516

16.7

%

Total

63,150,319

7,297,061

11.6

%

2019H1

I

3,911,679

28,326

0.7

%

II

6,050,230

86,221

1.4

%

III

4,993,682

97,867

2.0

%

IV

3,220,517

63,400

2.0

%

V

2,432,632

56,458

2.3

%

Total

20,608,740

332,273

1.6

%


M3+ Net Charge-Off Rate*

Loan Issued Period

Month on Book

4

7

10

13

16

19

22

25

28

31

34

2015Q1

0.8

%

2.0

%

3.4

%

4.7

%

5.7

%

6.5

%

7.1

%

7.5

%

7.7

%

7.8

%

7.8

%

2015Q2

0.8

%

2.3

%

3.8

%

5.2

%

6.4

%

7.3

%

7.9

%

8.3

%

8.5

%

8.7

%

8.8

%

2015Q3

0.4

%

1.6

%

3.1

%

4.4

%

5.6

%

6.5

%

7.1

%

7.6

%

7.9

%

8.1

%

8.4

%

2015Q4

0.4

%

1.6

%

3.1

%

4.4

%

5.5

%

6.3

%

6.9

%

7.4

%

7.9

%

8.3

%

8.5

%

2016Q1

0.3

%

1.2

%

2.5

%

3.6

%

4.5

%

5.2

%

5.8

%

6.4

%

7.0

%

7.4

%

7.6

%

2016Q2

0.4

%

1.6

%

3.1

%

4.3

%

5.2

%

6.0

%

6.8

%

7.6

%

8.1

%

8.4

%

8.7

%

2016Q3

0.3

%

1.6

%

3.1

%

4.3

%

5.4

%

6.6

%

7.8

%

8.6

%

9.2

%

9.5

%

9.8

%

2016Q4

0.2

%

1.5

%

2.9

%

4.4

%

5.9

%

7.4

%

8.4

%

9.3

%

10.0

%

10.4

%

2017Q1

0.3

%

1.5

%

3.2

%

5.1

%

7.1

%

8.6

%

9.8

%

10.8

%

11.5

%

2017Q2

1.1

%

2.9

%

5.6

%

8.4

%

10.4

%

12.1

%

13.5

%

14.5

%

2017Q3

0.3

%

2.9

%

6.3

%

9.1

%

11.6

%

13.6

%

15.0

%

2017Q4

0.5

%

3.8

%

7.2

%

10.4

%

13.2

%

15.3

%

2018Q1

0.4

%

3.0

%

6.6

%

10.1

%

12.9

%

2018Q2

0.5

%

3.6

%

7.4

%

10.8

%

2018Q3

0.3

%

2.9

%

6.2

%

2018Q4

0.3

%

2.5

%

2019Q1

0.2

%

*As one division has already been spun off from the company, as of third quarter 2019, M3+ net charge-off rates no longer reflect the risk performance of loans generated by this division.