U.S. Markets closed
  • S&P 500

    3,390.68
    -10.29 (-0.30%)
     
  • Dow 30

    27,463.19
    -222.21 (-0.80%)
     
  • Nasdaq

    11,431.35
    +72.41 (+0.64%)
     
  • Russell 2000

    1,590.71
    -14.50 (-0.90%)
     
  • Crude Oil

    38.87
    -0.70 (-1.77%)
     
  • Gold

    1,909.50
    -2.40 (-0.13%)
     
  • Silver

    24.43
    -0.14 (-0.55%)
     
  • EUR/USD

    1.1774
    -0.0039 (-0.3297%)
     
  • 10-Yr Bond

    0.7780
    -0.0230 (-2.87%)
     
  • Vix

    33.35
    +0.89 (+2.74%)
     
  • GBP/USD

    1.3026
    +0.0005 (+0.0378%)
     
  • USD/JPY

    104.5200
    -0.3150 (-0.3005%)
     
  • BTC-USD

    13,661.55
    +13.04 (+0.10%)
     
  • CMC Crypto 200

    270.32
    +9.03 (+3.46%)
     
  • FTSE 100

    5,728.99
    -63.02 (-1.09%)
     
  • Nikkei 225

    23,485.80
    -8.54 (-0.04%)
     

Yirendai Reports First Quarter 2019 Financial Results and Announces the Successful Closing of Business Realignment Transactions with CreditEase

BEIJING, July 10, 2019 (GLOBE NEWSWIRE) -- Yirendai Ltd. (YRD) (“Yirendai” or the “Company”), a leading fintech company in China, today announced its unaudited financial results for the first quarter ended March 31, 2019 and the successful closing of the business realignment transactions with CreditEase Holdings (Cayman) Limited, or CreditEase.

The business realignment transactions with CreditEase were successfully closed on July 10, 2019 EST. The entry into definitive agreements relating to the business realignment was previously announced on March 25, 2019. Pursuant to an amendment to the share subscription agreement between Yirendai and CreditEase, the consideration for the business realignment transactions was adjusted to a combination of 61,981,412 ordinary shares of Yirendai and a total of RMB2,889.0 million cash. At the closing, Yirendai issued 61,981,412 ordinary shares and paid RMB230.0 million cash to CreditEase, with the remainder of the cash consideration to be paid by installments in an 18-month period after closing with each payment contingent upon the acquired business achieving certain pre-agreed performance targets. Mr. Ning Tang, the executive chairman of Yirendai and the founder, chairman and Chief Executive Officer of CreditEase, has assumed the Chief Executive Officer role of Yirendai upon the closing of the transactions.

“Today, we are very pleased to announce the successful closing of our business realignment between Yirendai and CreditEase, and I have assumed the CEO role of the combined businesses and working along with our new management team to lead the business forward,” said Mr. Ning Tang, Chairman and Chief Executive Officer of Yirendai. “The businesses Yirendai assumed from CreditEase dovetail nicely with our existing operation and provided a strong foundation as we start our new strategic business transformation. The combined credit business will become one of the largest creditech platforms in China that provide a full suite of online/offline multichannel lending products and services. In addition, leveraging our large base of affluent investors, we believe we are well-positioned to build our Yiren Wealth Management business – a one-stop asset allocation-based digital wealth management solution for affluent investors. Along with our new and experienced management team, we look forward to building a leading tech-enabled integrated financial services platform that provides both wealth management and consumer credit services. We believe we are well positioned to capture the significant synergies presented by this business realignment and deliver long-term operating performance and shareholder value as we grow our business. In addition, as part of our strategic expansion, I am also excited to announce that we have signed a preliminary Memorandum of Understanding for the acquisition of a leading supply chain financing platform, DaoKouDai Technology Ltd based in Beijing, which will bring a strong team of experts to help us better serve small and medium enterprises. As part of our business realignment and strategic transformation, we will be operating under a new brand of Yiren Digital. Lastly, I would like to provide my sincere appreciation for the efforts and achievement Yihan Fang has contributed to the Company, and we wish her success in all future endeavors.”

Upon the consummation of the business realignment with CreditEase, the Company will be operating under a new brand of Yiren Digital and will have two main business––Yiren Credit and Yiren Wealth. In addition, the Company’s interim financial statements and operating data for the quarter ended March 31, 2019 reflect the businesses Yirendai assumed from CreditEase. Prior period financials have also been recasted to reflect the acquisition under common control. The valuation of the contingent consideration is preliminary and is subject to change.

First Quarter 2019 Operational Highlights
Wealth Management—Yiren Wealth

  • Cumulative number of investors served reached 2,159,490 as of March 31, 2019, representing an increase of 16% from 1,865,675 March 31, 2018.

  • Number of active investors in the first quarter of 2019 was 768,514, representing a decrease of 17% from 931,346 in the first quarter of 2018.

  • Total AUM for Yiren Wealth was RMB 47,257.2 million (US$7,041.5 million) as of March 31, 2019, representing a decrease of 4% from RMB 49,212.9 million as of March 31, 2018. Average AUM per investor reached RMB 141,406 (US$20,070) as of March 31, 2019, representing an increase of 12% from RMB 126,526 as of March 31, 2018.

  • AUM of non-P2P products amounted to RMB 457.7 million (US$68.2 million) in the first quarter of 2019, representing an increase of 8% from RMB 423.2 million in the first quarter of 2018. Non-p2p products include money market funds, mutual funds and insurance.

Consumer Credit—Yiren Credit

  • Total loan originations in the first quarter of 2019 reached RMB 10.9 billion (US$1.6 billion), representing a decrease of 45% from RMB 19.8 billion in the first quarter of 2018.

  • Cumulative number of borrowers served reached 4,404,812, representing an increase of 15% from 3,824,341 in the first quarter of 2018.

  • Number of borrowers in the first quarter of 2019 was 149,715, representing a decrease of 48% from 287,166 in the first quarter of 2018.

  • The percentage of loan volume generated by repeat borrowers was 38.8% in the first quarter of 2019.

  • Total outstanding principal balance of loans reached RMB 63,213.8 million (US$9,419.2 million) as of March 31, 2019, representing a decrease of 16% from RMB 75,271.5 million March 31, 2018.

“Last quarter we accomplished a milestone to prepare Yirendai for the next growth phase and strategic transformation,” said Mr. Dennis Cong, Chief Financial Officer of Yirendai. “With a more diverse and scalable mix of credit and wealth management service platforms as a result of our business realignment with CreditEase, and a more streamlined internal operation and organization, we are starting the rest of 2019 in a stronger position to serve the needs of our customers and drive our future growth. The first quarter of 2019 was a quarter of integration, adjustment, and investment for the company. To ensure better risk management of our platforms, we have taken a more conservative business growth strategy while made strong efforts to optimize our internal resources and operational efficiencies by integrating and consolidating various business functions that will help us to grow our business more effectively in the future. Building on that and with a more constructive regulatory environment of China’s P2P lending industry, we are getting ready to start our new growth phase for our consumer credit business and strategic transformation of our online wealth management businesses going forward. To support our business growth, we have entered into two strategic transactions in the second quarter of 2019 including first, a JV with ZBO Fintech as well as an acquisition of a Hong-Kong based private company that holds Type 1(Dealing in Securities) and Type 2(Dealing in Futures Contract) Licenses under regulations of Hong Kong Securities and Futures Commission to provide better service to our customers.”

First Quarter 2019 Financial Results

Total amount of loans facilitated in the first quarter of 2019 was RMB 10,934.9 million (US$1,629.4 million), compared to RMB 19,771 million in the same period last year. As of March 31, 2019, the total outstanding principal amount of the performing loans was RMB 63.2 billion (US$9.4 billion), decreased by 8% from RMB 68.3 billion as of December 31, 2018.

Total net revenue in the first quarter of 2019 was RMB 1,980.4 million (US$295.1 million), compared to RMB 3,764.7 million in the same period last year. Revenue from Yiren Credit reached RMB 1,459.0 million (US$217.4 million), representing a decrease of 56% from RMB 3,341.7 million in the first quarter of 2018. Revenue from Yiren Wealth reached RMB 521.4 million (US$77.7 million), representing an increase of 23% from RMB 423.0 million in the first quarter of 2018.

Sales and marketing expenses in the first quarter of 2019 were RMB 1,127.9 million (US$168.1 million), compared to RMB 2,156.0 million in the same period last year. Sales and marketing expenses in the first quarter of 2019 accounted for 10.3% of the total amount of loans facilitated, as compared to 10.9% in the same period last year due to increased marketing efficiencies.

Origination and servicing costs in the first quarter of 2019 were RMB 172.1 million (US$25.6 million), compared to RMB 264.6 million in the same period last year. Origination and servicing costs in the first quarter of 2019 accounted for 1.6% of the total amount of loans facilitated, compared to 1.3% in the same period last year mainly due to increased collection efforts and a decline in loan origination volume.

General and administrative expenses in the first quarter of 2019 were RMB 257.7 million (US$38.4 million), compared to RMB 522.1 million in the same period last year. General and administrative expenses in the first quarter of 2019 accounted for 13.0% of the total net revenue, compared to 13.9% in the same period last year mainly due to a decline in loan originations.

Allowance for contract assets in the first quarter of 2019 were RMB 191.1 million (US$28.5 million), compared to RMB 235.0 million in the same period last year. The decrease was mainly attributable to changes in future collectability estimates as well as decreased loan origination volume.

Income tax expense in the first quarter of 2019 was RMB 76.5 million (US$11.4 million).

Net income in the first quarter of 2019 was RMB 369.1 million (US$55.0 million), compared to RMB 535.9 million in the same period last year.

Adjusted EBITDA (non-GAAP) in the first quarter of 2019 was RMB 397.3 million (US$59.2 million), compared to RMB 648.9 million in the same period last year. Adjusted EBITDA margin1 (non-GAAP) in the first quarter of 2019 was 20.1%, compared to 17.2% in the same period last year.

__________________

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

Basic income per ADS in the first quarter of 2019 was RMB 3.99 (US$0.59), compared to RMB 5.85 in the same period last year. During 2019 the target business of Ocean was transferred to Yirendai in an internal reorganization under common control. Contemporaneously with this transaction, 30,990,706 shares were issued by Yirendai to affiliate entities. For purposes of calculating earnings per share, weighted average shares prior to the reorganization have been retroactively adjusted to give effect to the reorganization for all historical periods presented in the successor financial statements.

Diluted income per ADS in the first quarter of 2019 was RMB 3.96 (US$0.59), compared to RMB 5.77 in the same period last year.

Net cash used in operating activities in the first quarter of 2019 was RMB 658.3 million (US$98.1 million), compared to net cash used in operating activities of RMB 817.0 million in the same period last year.

As of March 31, 2019, cash and cash equivalents was RMB 2,519.0 million (US$375.3 million), compared to RMB 2,605.9 million as of December 31, 2018. As of March 31, 2019, the balance of held-to-maturity investments was RMB 312.8 million (US$46.6 million), compared to RMB329.6 million as of December 31, 2018. As of March 31, 2019, the balance of available-for-sale investments was RMB 1,187.6 million (US$177.0 million), compared to RMB835.6 million as of December 31, 2018.

Delinquency rates. As of March 31, 2019, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 0.9%, 1.9%, and 1.7%, compared to 1.0%, 1.8% and 1.7% as of December 31, 2018. The increase in delinquency rates was partially due to the slower growth in loan volumes and volatile credit performance of the loans.

Cumulative M3+ net charge-off rates. As of March 31, 2019, the cumulative M3+ net charge-off rate for loans originated in 2016 was 9.0%. As of March 31, 2019, the cumulative M3+ net charge-off rate for loans originated in 2017 was 12.7%. As of March 31, 2019, the cumulative M3+ net charge-off rate for loans originated in 2018 was 5.9%.

Recent Developments
Strategic Transactions
In July 2019, Yirendai signed a preliminary Memorandum of Understanding for the acquisition of a leading supply chain financing platform, DaoKouDai Technology Ltd which is based in Beijing.

In May 2019, Yirendai and ZBO Fintech established a joint venture to provide creditech solutions to ZBO Fintech as well as various financial institutions. ZBO Fintech is a B2B2C auto financing company incubated by PICC Financial Services Company Ltd. Yirendai and CreditEase Fintech Investment Fund are both shareholders of ZBO Fintech.

In July 2019, Yirendai signed a definitive agreement to acquire a private company incorporated in Hong Kong. The target company has a license to engage in Type 1 and Type 2 regulated activities under the rules and regulations of the Hong Kong Securities and Futures Commission.

Institutional Funding Update
As of July 10, 2019, the Company had secured funding in a total amount of RMB19 billion from four commercial banks in China.

Increase in Registered Capital
In preparation for the upcoming P2P registration and to lay a solid foundation for the future growth, the Company is in the process of increasing its registered capital by RMB500 million effective July 2019.

Management Change
Mr. Ning Tang has assumed the position of the Chief Executive Officer of the Company, while he will continue to serve as the chairman of the board of directors and the Chief Executive Officer of CreditEase.

Ms. Yihan Fang has resigned from her position as Chief Executive Officer of the Company and Yiren Wealth, a business division of the Company, for personal reasons.

Dr. Yichuan Pei has resigned from his position as Chief Risk Officer of the Company for personal reasons.

Mr. Huan Chen, our Board of Director, will assume the position of Chief Risk Officer of the Company, while he will continue to serve as Chief Strategy Officer at CreditEase.

Ms. Wei Wang will assume the role of Chief Executive Officer of Yiren Credit.

Ms. Xiao Shang will assume the role of Chief Executive Officer of Yiren Wealth, while she will continue to serve as a senior vice president at CreditEase Wealth Management.

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 6.7112 to US$1.00, the effective noon buying rate on March 29, 2019, 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. Eastern Time on July 10, 2019, (or 8:00 a.m. Beijing/Hong Kong Time on July 11, 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:

4659887

A replay of the conference call may be accessed by phone at the following numbers until July 18, 2019:

International:

+61 2-8199-0299

U.S. Toll-Free:

+1 646-254-3697

Replay Access Code:

5810

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 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. (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. 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 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
Investor Relations
Email: ir@Yirendai.com


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 Year
Ended

March 31,
2018

March 31,
2019

March 31,
2019

December 31,
2018

RMB

RMB

USD

RMB

Net revenue:

Loan facilitation services

2,997,463

1,055,046

157,207

7,309,403

Post-origination services

281,118

296,279

44,147

1,601,424

Account management services

361,742

488,340

72,765

1,806,732

Others

124,348

140,743

20,971

526,560

Total net revenue

3,764,671

1,980,408

295,090

11,244,119

Operating costs and expenses:

Sales and marketing

2,155,962

1,127,945

168,069

6,658,270

Origination and servicing

264,613

172,123

25,647

1,061,289

General and administrative

522,091

257,705

38,399

1,755,655

Allowance for contract assets

235,014

191,105

28,476

992,592

Total operating costs and expenses

3,177,680

1,748,878

260,591

10,467,806

Gain on disposal of loan receivable and other beneficial rights

-

84,511

12,592

655,884

Interest income, net

28,269

95,569

14,240

81,899

Fair value adjustments related to Consolidated ABFE

7,071

34,998

5,215

243,122

Non-operating (expenses)/ income, net

(576

)

4,614

688

26,323

Income before provision for income taxes

621,755

451,222

67,234

1,783,541

Share of results of equity investees

(2,324

)

(5,603

)

(835

)

(9,295

)

Income tax expense

83,578

76,534

11,404

194,287

Net income

535,853

369,085

54,995

1,579,959

Weighted average number of ordinary shares outstanding, basic

183,349,505

185,126,457

185,126,457

184,225,643

Basic income per share

2.9226

1.9937

0.2971

8.5762

Basic income per ADS

5.8452

3.9874

0.5942

17.1524

Weighted average number of ordinary shares outstanding, diluted

185,754,475

186,578,885

186,578,885

186,270,515

Diluted income per share

2.8847

1.9782

0.2948

8.4821

Diluted income per ADS

5.7694

3.9564

0.5896

16.9642

Unaudited Condensed Consolidated Cash Flow Data

Net cash used in operating activities

(817,030

)

(658,306

)

(98,090

)

(3,959,107

)

Net cash (used in)/ provided by investing activities

(262,560

)

(225,931

)

(33,665

)

3,302,148

Net cash provided by/ (used in) financing activities

236,574

469,889

70,016

(793,472

)

Effect of foreign exchange rate changes

(10,976

)

(2,196

)

(327

)

3,631

Net decrease in cash, cash equivalents and restricted cash

(853,992

)

(416,544

)

(62,066

)

(1,446,800

)

Cash, cash equivalents and restricted cash, beginning of period

4,480,272

3,033,472

452,001

4,480,272

Cash, cash equivalents and restricted cash, end of period

3,626,280

2,616,928

389,935

3,033,472

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

As of

December 31,
2018

March 31,
2019

March 31,
2019

RMB

RMB

USD

Cash and cash equivalents

2,605,926

2,519,040

375,349

Restricted cash

427,546

97,888

14,586

Accounts receivable

40,310

70,281

10,472

Contract assets, net

3,909,263

3,431,014

511,237

Contract cost

145,460

143,323

21,356

Prepaid expenses and other assets

2,552,319

1,192,574

177,699

Loans at fair value

1,375,221

851,406

126,863

Amounts due from related parties

1,357,305

270,626

40,325

Held-to-maturity investments

329,597

312,768

46,604

Available-for-sale investments

835,565

1,187,588

176,956

Long term investments

194,121

143,864

21,436

Property, equipment and software, net

266,002

239,822

35,735

Deferred tax assets

184,136

156,322

23,293

Right-of-use assets

389,299

58,007

Total assets

14,222,771

11,005,815

1,639,918

Accounts payable

307,046

53,667

7,997

Amounts due to related parties

8,246,300

258,038

38,449

Liabilities from quality assurance program and guarantee

9,950

8,384

1,249

Deferred revenue

569,469

459,806

68,513

Payable to investors at fair value

626,207

7,386

1,101

Accrued expenses and other liabilities

2,193,575

2,154,914

321,092

Refund liability

2,145,748

2,137,835

318,546

Deferred tax liabilities

486,773

417,629

62,229

Lease liabilities

348,176

51,880

Contingent consideration

2,626,734

391,396

Total liabilities

14,585,068

8,472,569

1,262,452

Ordinary shares

77

77

11

Shares to be issued

2,754,444

410,425

Additional paid-in capital

1,293,968

1,080,395

160,984

Treasury stock

(254

)

(5,694

)

(848

)

Accumulated other comprehensive income

16,390

13,160

1,961

Accumulated deficit

(1,672,478

)

(1,309,136

)

(195,067

)

Total (deficit)/ equity

(362,297

)

2,533,246

377,466

Total liabilities and equity

14,222,771

11,005,815

1,639,918

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 Year
Ended

March 31,
2018

March 31,
2019

March 31,
2019

December 31,
2018

RMB

RMB

USD

RMB

Operating Highlights

Amount of investment

18,027,655

11,435,588

1,703,956

70,667,346

AUM of investment

72,733,920

67,251,285

10,020,754

71,091,980

Number of investors

331,519

200,780

200,780

745,799

Amount of loans facilitated

19,771,068

10,934,923

1,629,354

63,303,236

Number of borrowers

287,166

149,715

149,715

922,593

Remaining principal of performing loans

75,271,466

63,213,843

9,419,156

68,345,361

Segment Information

Wealth management:

Revenue

422,990

521,434

77,696

2,021,747

Sales and marketing expenses

698,933

143,904

21,442

1,242,439

Consumer credit:

Revenue

3,341,681

1,458,974

217,394

9,222,372

Sales and marketing expenses

1,457,029

984,041

146,627

5,415,831

Reconciliation of EBITDA

Net income

535,853

369,085

54,995

1,579,959

Interest income, net

(28,269

)

(95,569

)

(14,240

)

(81,899

)

Income tax expense

83,578

76,534

11,404

194,287

Depreciation and amortization

38,253

32,502

4,843

147,992

Share-based compensation

19,533

14,699

2,190

119,998

Adjusted EBITDA

648,948

397,251

59,192

1,960,337

Adjusted EBITDA margin

17.2

%

20.1

%

20.1

%

17.4

%

Delinquency Rates

Delinquent for

15-29 days

30-59 days

60-89 days

All Loans

December 31, 2014

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

%

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 March 31, 2019

Total Net Charge-Off
Rate

as of March 31, 2019

(in RMB thousands)

(in RMB thousands)

2015

I

4,894,936

204,034

4.2

%

II

17,502,449

779,071

4.5

%

III

11,272,838

716,717

6.4

%

IV

11,283,656

1,365,938

12.1

%

V

11,199,563

1,734,289

15.5

%

Total

56,153,444

4,800,049

8.5

%

2016

I

5,858,473

229,860

3.9

%

II

12,781,372

514,171

4.0

%

III

9,951,614

711,424

7.1

%

IV

8,652,543

891,251

10.3

%

V

16,981,990

2,539,120

15.0

%

Total

54,225,993

4,885,827

9.0

%

2017

I

11,223,886

604,798

5.4

%

II

12,270,230

1,201,390

9.8

%

III

13,837,922

1,804,614

13.0

%

IV

13,663,558

1,975,100

14.5

%

V

19,680,365

3,400,179

17.3

%

Total

70,675,961

8,986,081

12.7

%

2018

I

9,604,220

251,825

2.6

%

II

14,656,703

610,073

4.2

%

III

13,903,094

756,058

5.4

%

IV

13,812,989

1,021,518

7.4

%

V

11,326,230

1,085,458

9.6

%

Total

63,303,236

3,724,932

5.9

%

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

%

2.2

%

3.7

%

5.1

%

6.2

%

7.0

%

7.5

%

7.9

%

8.1

%

8.1

%

8.2

%

2015Q2

0.8

%

2.4

%

4.0

%

5.4

%

6.6

%

7.5

%

8.2

%

8.5

%

8.7

%

8.8

%

8.9

%

2015Q3

0.4

%

1.6

%

3.2

%

4.5

%

5.6

%

6.5

%

7.1

%

7.5

%

7.8

%

8.1

%

8.3

%

2015Q4

0.4

%

1.6

%

3.1

%

4.4

%

5.5

%

6.3

%

6.9

%

7.4

%

7.8

%

8.2

%

8.5

%

2016Q1

0.3

%

1.3

%

2.5

%

3.6

%

4.5

%

5.2

%

5.8

%

6.4

%

7.0

%

7.3

%

7.6

%

2016Q2

0.4

%

1.7

%

3.1

%

4.3

%

5.2

%

6.0

%

6.8

%

7.6

%

8.1

%

8.4

%

2016Q3

0.3

%

1.6

%

3.0

%

4.2

%

5.4

%

6.6

%

7.8

%

8.6

%

9.1

%

2016Q4

0.2

%

1.5

%

2.9

%

4.3

%

5.9

%

7.4

%

8.4

%

9.2

%

2017Q1

0.3

%

1.5

%

3.2

%

5.1

%

7.1

%

8.5

%

9.7

%

2017Q2

1.1

%

2.9

%

5.6

%

8.3

%

10.2

%

11.9

%

2017Q3

0.3

%

2.9

%

6.3

%

9.0

%

11.4

%

2017Q4

0.5

%

3.8

%

7.2

%

10.4

%

2018Q1

0.4

%

3.0

%

6.5

%

2018Q2

0.5

%

3.6

%

2018Q3

0.3

%