Would it be named and shamed on the Consumer Rights Day evening gala on March 15?
Chinese internet bank WeBank topped last week’s weekly blacklist of the financial payment sector composed by Heimao Tousu, a third-party consumer rights protection platform under tech giant Sina (SINA:NASDAQ).
According to the watchdog, Tencent-backed WeBank ranked first on the weekly blacklist for the first week of March and second for the first quarter of 2022. In the past 30 days, this online-only bank received 334 complaints, of which 12 have been handled and one marked as completed; cumulatively, 6,137 complaints were lodged against WeBank, 85 were dealt with and two flagged as completed.
According to lanjinger.com, a business media portal, a number of users alleged that WeBank had engaged in violent debt collection and even harassed their family members. Another user reported that the bank had even insulted himself, which seriously affect his personal life and led to depression.
The two main products that drew criticism were Weilidai and We2000.
The number of complaints of its core lending product Weilidai (Chinese: 微粒贷), which literally means “a tiny bit of loan,” had reached 12,450 as of March 14, 2022, with most of them revolving around debt violent collection, invasion of privacy and deductions from unlinked bank cards.
Launched on QQ (another popular messaging app from Tencent) and WeChat in mid-2015, Weilidai is WeBank's first online consumer loan product. It grants personal loans through big data credit ratings and also biometrics without requiring any physical assets to be put up as collateral. It offers a credit line from CNY 500 to CNY 200,000 to those so-called “long-tail” customers with absolute flexibility for repayment plans.
As of December 2020, Weilidai had widened its coverage to 270 million clients across 560 cities in China, 80% of which had a college degree or below, and the loan per transaction totaled CNY 8,000.
Meanwhile, complaints against We2000 showed that the credit limit was restored after the user made full and on-time repayments, but it could not function as usual. We2000 is WeBank’s another all-in-one product that combines account, deposit and withdrawal, consumer payment and points payback.
Several other consumer finance companies and loan products have also received a lot of criticism. The top five culprits in the financial payments sector include Home Credit (64,373), 9f Bank (Chinese: 玖富万卡) (51,890), Fenqile (Chinese: 分期乐) (46,875), Niwodai (Chinese: 你我贷) (36965) and JD Finance (31313) (restructured as JD Technology amid Beijing’s tech crackdown in 2021).
According to WeBank’s 2020 annual report, during the reporting period, its credit impairment losses totaled CNY 6.152 billion in 2020, while the number stood at CNY 2.594 billion at the end of 2018.
In terms of asset quality, the bank's non-performing loan ratio was 1.2% as at the end of 2020, down 0.04% over 2019. The provision coverage ratio decreased 13.05% from the end of the previous year.
In terms of capital adequacy indicators, WeBank's core tier-1 capital adequacy ratio, tier-1 capital adequacy ratio and capital adequacy ratio were 11.36%, 11.36% and 12.41% at the end of 2020, down 0.48%, 0.48% and 0.49% respectively from the end of 2019.