You can get options to improve the recovery rate of creditor's rights value, thus reducing the loss of non-performing loans; At the same time, it has improved the operation of enterprises, and the government has not spent much money. These advantages can be proved by the successful experience of non-performing loans of more than 75% enterprises in Poland and the successful cases of domestic banks. However, this way of dealing with non-performing loans needs: first, banks have high-quality and experienced assets reorganization talents. The reality is that most commercial banks in China are seriously short of such talents at present. Second, the relevant legal protection. For example, commercial banks are allowed to hold shares in companies. However, due to the current management system of "separate operation" in China, the current "Commercial Bank Law" stipulates that commercial banks cannot invest and hold shares in China. Therefore, commercial banks can only intervene as "consultants" rather than "shareholders" in the process of asset restructuring aimed at disposing of non-performing loans. In this way, if the enterprise defaults or "opportunism" behavior occurs in the process of restructuring, the bank will be at a disadvantage. Third, banks bear the risk of loan losses caused by the failure of asset restructuring. Because banks can't make a complete assessment of all possible situations after asset reorganization in advance. In a word, although asset reorganization provides a new choice for state-owned banks to control the loss of non-performing loans, its time cost and system cost are high.
2. Debt-to-equity swap. There are two specific forms for banks to dispose of non-performing loans by converting creditor's rights into equity: direct shareholding by banks and shareholding by asset management companies and other institutions. Due to the restriction of the current commercial banking law, Chinese banks generally realize the conversion of creditor's rights into equity through other institutions. For banks, it is assumed that the weak repayment ability of enterprises is mainly due to the unreasonable capital structure and the repayment potential of enterprises. Debt-to-equity swap may reduce the loss of non-performing loans of banks and even turn non-performing loans into normal loans. However, it is difficult for banks to determine whether the borrowing enterprises meet the conditions of debt-to-equity swap, how to solve the problem of controlling shares, how to ensure the normal operation of enterprises after reducing the debt burden, and how to solve the channels for commercial banks to withdraw from equity. In the current institutional environment, it is difficult or impossible to determine completely in advance. This means that although debt-to-equity swaps can enable banks to indirectly control the rights of enterprises, the information cost is high and the time cost of disposing of non-performing loans is high.
3. Selling non-performing loans. The sale of non-performing loans means that banks directly transfer non-performing loans to other investors through the market. Specific selling methods include bidding, agreement, bidding and auction. The advantage of this method is that banks can divest non-performing loans at one time and directly recover cash flow in a short time. Moreover, this method has high transparency and high costs and benefits for both parties to the transaction.
The configuration structure is relatively clear and the information cost is relatively low. However, the sale of non-performing loans needs a process, which requires a developed institutional investor market and open and accurate information disclosure, which are often lacking in countries with economies in transition (including China). When dealing with non-performing loans in this way, another key problem that state-owned banks must solve is how to find a price acceptable to both parties. Experience at home and abroad shows that due to the great differences between market investors and banks in the pricing of non-performing loans, banks often make large price discounts on non-performing loans to be sold in order to make them acceptable to market investors. In addition, commercial banks in China have to pay 20% income tax and 5% auction fee when auctioning debt-paying assets. This method has the advantages of quick cash recovery and high transaction transparency, but it has to bear higher value loss and transaction cost.
4. Securitization. Refers to the conversion of non-transactional indirect credit instruments into transactional direct credit instruments. This refers to the securitization of non-performing loans. The basic approach is: the bank first concentrates the non-performing loans, then re-divides the portfolio, and then resells them to market investors, thus making this (or this group) non-performing loans disappear from the bank's balance sheet. For commercial banks, the advantage of securitization of non-performing loans is that it can introduce new funds to dispose of non-performing loans and accelerate the disposal of non-performing loans. However, international experience shows that non-performing loans that can be successfully securitized and sold in the secondary market are mainly non-performing loans with real estate mortgage, because the value of such non-performing loans is relatively complete and the cash flow is relatively clear and stable. Most of the non-performing loans of state-owned banks in China are credit loans, and a considerable number of loan contracts are incomplete, and the proportion of non-performing loans with real estate mortgage is very small. The structure and types of such loans are difficult to meet the requirements of market investors for risk control in the process of securitization, so it is difficult to securitize such non-performing loans.
5. Partnership. Simply put, a joint venture is a "cooperative company" or "partnership company" established by both parties to the non-performing loan transaction. The investor shall be fully responsible for the daily operation of the cooperative company and share the proceeds from the disposal of non-performing loans according to the shares. In China, Huarong Asset Management Company first announced in 2002 that it had set up two cooperative companies with Morgan Stanley and Goldman Sachs respectively to deal with non-performing loans. In order to avoid the constraints of the current commercial banking law, China's commercial banks have adopted a flexible way, that is, to operate non-performing loans with investors in the form of cooperation agreements. This transaction structure is actually an institutional response for both parties to save information cost and transaction cost. Because, in the non-performing loan transaction, the information of both parties is often asymmetric, it is difficult for banks to know all potential buyers and their bids exactly, and it is also difficult for buyers to confirm whether the bank has fully disclosed the real information of non-performing loans. In addition, both parties to the transaction
There is also insufficient information about the future changes in the value of non-performing loans. Replacing the sale contract of non-performing loans with the contractual arrangement of partnership companies can save the information cost and transaction cost of dealing with non-performing loans. Because within the enterprise, information can be exchanged more easily and both sides are more willing to cooperate. China's commercial banks choose this way to deal with non-performing loans, mainly because they can immediately get a discount income (that is, sell non-performing loans to investors at a discount), and then get equity income by converting non-performing loans with surplus value into shares to participate in cooperation agreements (or joint ventures), thus improving the overall efficiency of dealing with non-performing loans. The superiority of this method can be confirmed by the successful experience of dealing with non-performing loans in South Korea. Compared with the above-mentioned disposal methods of non-performing loans, the transaction structure of joint venture can better take into account the contradiction between time constraints and value constraints faced by state-owned commercial banks when disposing of non-performing loans. However, this transaction structure has higher signing cost and system supply cost.