Recently, the bidding information released by the Banking Industry Credit Asset Registration and Circulation Center Co., Ltd. (referred to as "Yindeng Center") shows that as of the first half of this year, the retail non-performing assets of 5 banks have been packaged in Yindeng. The center completed the bidding, covering various forms such as credit cards, personal consumption, and personal business.
Industry experts said that the restart of commercial banks’ retail non-performing asset transfer business is of great significance for standardizing and innovating the disposal of bank non-performing assets and improving the quality and efficiency of financial institutions in serving the real economy.
Helping banks to offload their "burden"
In January this year, the China Banking Regulatory Commission issued the "Notice on Carrying out the Pilot Work on the Transfer of Non-Performing Loans" (referred to as the "Notice"), marking the Since the promulgation of the "Administrative Measures for the Batch Transfer of Non-Performing Assets of Financial Enterprises", the batch transfer business of retail non-performing assets has been officially restarted on a pilot basis with some banks. The "Notice" shows that 6 large state-owned banks and 12 national joint-stock banks participate in the first batch of pilot banks; institutions participating in acquisitions include financial asset management companies, qualified local asset management companies and financial asset investment companies. At the same time, the scope of personal loans participating in the pilot mainly includes personal consumer credit loans, credit card overdrafts and personal business credit loans that have been classified as non-performing loans.
The transfer of non-performing loans means that banks package and sell non-performing loans to obtain funds, and reduce the bank's non-performing loan ratio through transfer. Since last year, commercial banks have been increasing their efforts to dispose of non-performing assets. According to non-performing loan data disclosed by more than 30 commercial banks, the balance of non-performing loans will increase by 13% in 2020, while the balance of retail non-performing loans will increase by 15%.
As a credit card retail business that has grown rapidly in recent years, the total number of overdue credit cards for six months reached 74.3 billion yuan at the end of 2019, accounting for 0.98% of the credit card balance payable. As of the end of 2020, the total amount of outstanding credit cards that were overdue for six months reached 83.9 billion yuan, accounting for 1.06% of the credit card balance payable, an increase of nearly 10 billion yuan.
Retail non-performing assets have increased. In this regard, Zeng Gang, deputy director of the National Finance and Development Laboratory, said that on the one hand, due to the rapid expansion of the debt scale of the residential sector. In recent years, the capital leverage ratio of some residents has increased significantly, and over time they have gradually entered a period of risk exposure. The COVID-19 epidemic has intensified the risk exposure, especially the cash flow of individual industrial and commercial households, small and micro enterprises and other market entities, resulting in retail sales. In particular, overdue non-performing assets with weak guarantees have even exploded in a concentrated manner.
On the other hand, banks have limited channels to digest non-performing assets. According to the "Management Measures for the Write-off of Bad Debts of Financial Enterprises", the write-off of retail non-performing assets needs to meet many conditions, but currently there are not many banks and institutions with this qualification, making the disposal of retail non-performing assets relatively difficult for a long time. difficulty.
Innovate ways to resolve non-performing assets.
In early June, ICBC issued an online public bidding transfer announcement for the fifth phase of 2021 personal non-performing loans (personal operating credit loans) at the Yindeng Center: 11 households were involved, with a total creditor's rights of 4.366 million yuan. In the first half of this year, Minsheng Bank, Industrial Bank, Bank of Communications, and Ping An Bank successively issued announcements on the transfer of personal non-performing loans, involving 19, 23, 56, and 113 borrowers respectively; the total outstanding principal and interest involved were approximately 18.626 million. yuan, 8.914 million yuan, 11.867 million yuan, and 77.413 million yuan.
“According to previous regulations, regulatory authorities do not allow banks to transfer personal non-performing assets in batches, and even corporate non-performing assets can only be ‘packaged’ by three or more households.” Zeng Gang said that in general, Look, promoting the batch transfer of retail non-performing loans is an innovative way to resolve non-performing assets and plays an important role in improving banks’ capital operation levels and refined management capabilities.
As far as the transferor bank is concerned, the transferee is currently responsible for the collection of batch transfers of non-performing assets, including customer accounting processing, cred
At the same time, in order to serve the market and assist in supervision , Yindeng Center released a statistical table of institutions that have opened non-performing loan transfer business accounts. Data show that as of July 23, there were 148 large state-owned commercial banks (including local branches); 155 joint-stock commercial banks (including local branches); 100 financial management companies (including local branches); and 38 local asset management companies. ; Two financial investment companies.
The relevant person in charge of the China Banking Regulatory Commission stated that the role of the Yinden Center as a pilot platform should be actively brought into play.
According to the requirements of the pilot work, the Yindeng Center formulated the pilot business rules for the transfer of non-performing loans, specifically responsible for the asset registration, listing and display, transfer services, information disclosure and market monitoring of non-performing loans, and reported the pilot status to the regulatory authorities in a timely manner to further Promoted the healthy and orderly development of non-performing loan transfer work.
Improve batch transfer service.
Although some banks and financial institutions actively participate in the batch transfer pilot work, opening a door for the disposal of retail non-performing assets, there are still some systems and mechanisms that need to be improved and optimized.
Xu Hongcai, deputy director of the Economic Policy Committee of the China Policy Research Association, said that non-performing assets mean that there is a risk that the principal will be difficult to recover, but it is possible to recover it. Therefore, the key to market-oriented processing is to form a benign auction mechanism, introduce many qualified buyers, and handle the market-oriented transfer of auction prices. After the acquisition, the investor takes a series of disposal measures, introduces new strategic investments through the target company, and revitalizes the resources of the non-performing target, which may also add value in the future.
Zeng Gang said that judging from the actual situation of batch transfer projects, the highest asset package valuation reached 40%. With the normalization of bulk transfer business, both buyers and sellers will gradually return to rationality. Judging from existing comparable assets, it is expected that the normal price should be around 10% of the principal.
In the next step, market-oriented institutions with strong collection and disposal capabilities will gain new opportunities. Benefiting from the expansion of commercial banks' entrusted collection services, collection companies at the top of the market have accumulated rich customer data and can accurately classify and value borrowers through statistical methods. Nevertheless, according to the requirements of the "Notice", asset management companies can only dispose of personal loans purchased in batches through self-collection, restructuring, etc., and cannot transfer them to external parties again. Therefore, asset managers need to be self-centered and flexible.
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