This year's "Government Work Report" proposes to use market-oriented and legal methods to resolve hidden risks, effectively respond to external shocks, and firmly maintain the bottom line of no systemic risks.
Also proposed to speed up the disposal of non-performing assets.
The so-called disposal of non-performing assets refers to the value realization and value enhancement activities of assets through the comprehensive use of all means and methods within the scope of laws and regulations.
In the financial system, there is a special type of institutions that take financial risks as their own responsibility and specialize in disposing of non-performing assets—financial asset management companies.
At present, a number of financial asset management companies have successively released their 2021 annual reports.
Financial asset management companies should give full play to their professional advantages, focus on the main business of disposing of non-performing assets, and exert unique functions to help resolve financial risks.
Increased efforts to dispose of non-performing assets
In 2021, the banking industry will accumulatively dispose of non-performing assets of 3.13 trillion yuan, a year-on-year increase of 0.11 trillion yuan and a record high, effectively reducing the level of credit risk and providing an important guarantee for keeping the bottom line of systemic risks.
However, it should be noted that there is still room for pressure reduction in the non-performing loan ratio of banks.
The 2022 work conference of the China Banking and Insurance Regulatory Commission proposed to support the accelerated disposal of non-performing assets.
Data show that at the end of December 2021, the overall non-performing loan ratio of commercial banks was 1.73%.
Among them, the non-performing ratio of large banks was 1.37%, down 6 BPs year-on-year, and remained at a relatively low level; the non-performing ratio of joint-stock banks was 1.37%, down 13 BPs year-on-year, and the non-performing ratio of city commercial banks was 1.9%, an increase of 9 bps compared to the same period last year. BP, the non-performing rate of rural commercial banks was 3.63%, a decrease of 25 BP.
Zeng Gang, deputy director of the National Finance and Development Laboratory, said: "In general, the NPL ratios of large banks and joint-stock banks have continued to improve, while the NPL ratios of urban commercial banks and rural commercial banks are still high and highly repetitive. The growth in the early stage has accelerated, and the current non-performing rate is still at a high level of 3.63%, and the pressure drop situation is relatively severe."
Large state-owned asset management companies will increase their efforts to acquire and dispose of non-performing assets in 2021.
According to the annual report data, China Great Wall Assets will acquire 114.7 billion yuan of new financial non-performing asset claims in 2021, and develop non-financial non-performing asset business scale of 21.5 billion yuan.
China Huarong Assets will acquire a non-performing asset package of 77.9 billion yuan in 2021.
China Cinda Assets acquired RMB 59.6 billion worth of non-performing asset packages throughout the year.
Among them, the newly acquired financial non-performing assets of 48.564 billion yuan, a year-on-year increase of 7.65%; the acquisition of non-bank financial institutions' non-performing assets of 11.021 billion yuan, a year-on-year increase of 105.18%.
Liang Qiang, President of China Huarong Assets, said: "As of the end of 2021, the balance of non-performing loans of commercial banks was 2.8 trillion yuan, up 3.7% from the beginning of the year. Asset management companies and banks are engaged in the batch transfer of non-performing assets, the resolution of large-scale risk projects, and the disposal of off-balance sheet assets. There is still a lot of room for cooperation in bankruptcy and reorganization business. For urban commercial banks and rural commercial banks, the non-performing rate is relatively high, and there is a greater demand for batch transfer of non-performing asset packages.”
A number of asset management companies stated that they would focus on the main business of non-performing assets, adhere to deepening the supply-side structural reform as the main line, continuously increase the acquisition of financial non-performing assets, and do a good job in the disposal of non-performing assets of financial institutions.
In order to speed up the disposal of non-performing assets, Cinda Assets actively built an online asset promotion platform, continued to promote the Internet marketing model, and built a multi-platform and multi-channel platform including official website, official account, mini program, online auction area and live broadcast promotion. Online asset disposal marketing and promotion system. In 2021, the company will make 470 transactions through the Internet auction platform, with a transaction value of 27.6 billion yuan.
The non-performing asset promotion platform "China Cinda Smart Tao" launched by the company has reached 30 billion yuan in assets listed on the Internet so far.
Help defuse risks in the real estate sector
Since 2021, with the tightening of regulatory policies on real estate credit and pre-sale funds, the sales market and land market have both cooled down significantly, superimposing the exposure of a few real estate companies' risk problems.
At the end of 2021, the central bank and the China Banking and Insurance Regulatory Commission jointly issued the "Notice on Doing a Good Job in M&A Financial Services for Risk Disposal Projects of Key Real Estate Enterprises", encouraging banking financial institutions to carry out sound and orderly development in accordance with the principles of legal compliance, controllable risks, and sustainable business. Real estate project M&A loan business, support high-quality real estate enterprises to merge and acquire projects of key real estate enterprises, and debt-based acquisitions for risk-exposed enterprise projects.
In this context, financial asset management companies participate in asset disposal, project mergers and acquisitions and related financial intermediary services of risky real estate enterprises in accordance with the principles of marketization and rule of law.
In February of this year, China Orient Asset Management obtained a wholesale issuance of 10 billion yuan of financial bonds to bail out the real estate industry.
In March, China Great Wall Assets was also approved to issue 10 billion yuan of financial bonds in the national inter-bank bond market for risk mitigation and disposal of high-quality projects of key real estate companies.
The relevant person in charge of Great Wall Assets said that the issuance of bonds will help it increase its efforts to serve the real economy, provide long-term, low-cost funds for the bailout and risk reduction of real enterprises, and promote a virtuous circle and healthy development of the real estate industry.
The company will adhere to the principles of compliance with laws and regulations, controllable risks and sustainable business, and carry out financial business related to risk disposal of real estate enterprises in a stable and orderly manner. and other related non-performing assets, and repay the mature stock bonds.
Liang Qiang believes that in addition to issuing bonds, asset management companies can actively participate in the restructuring and revitalization of troubled housing companies and troubled assets on the basis of continuing to increase the acquisition and disposal of financial non-performing assets.
In addition, with the conclusion of the three-year reform action plan for state-owned enterprises, the reorganization of distressed enterprises in the capital market, the bankruptcy and reorganization of enterprises, the optimized allocation of resources and energy, and the risk mitigation of small and medium-sized financial institutions, financial asset management companies can give full play to their counter-cyclical and financial rescue functions. .
Gao Gan, assistant to the president of China Huarong, said: "The company will base itself on its own stock and the stock in the region where it is located, focus on the upstream and downstream of real estate enterprises, and cooperate with strategic customers in the industrial chain to carry out mergers and acquisitions and reorganizations, so as to take advantage of risks such as risk isolation, custody of distressed real estate enterprises, and assistance in emergency projects. Mergers and acquisitions, providing quasi-benefit debt assistance, setting up special funds for real estate reorganization and revitalization, etc., through comprehensive policies, focusing on participating in the implementation of 'guaranteed housing' and 'last-end housing revitalization' and other businesses that are supported and encouraged by macro policies and are related to social and people's livelihood, Service risk mitigation.”
Building a diversified non-performing asset market
At present, the market supply of non-performing assets presents multiple characteristics.
Facing the multiple pressures faced by the domestic economic development, the supervision requires the prevention and resolution of systemic financial risks to move forward.
Supervision supports credit insurance funds, asset management companies and trust companies in cooperating to dispose of their non-performing assets and trust risk assets, as well as serving the M&A needs of key real estate enterprise risk disposal projects, allowing them to participate in bankruptcy cases as members of liquidation groups, and encouraging participation in risk resolution of small and medium-sized banks.
On January 12, 2021, the General Office of the China Banking and Insurance Regulatory Commission issued the "Notice on Carrying out the Pilot Work of Transfer of Non-performing Loans" to clear the way for the batch transfer of non-performing assets.
Zeng Gang believes that the scope of the pilot project is likely to be expanded in the future.
Judging from the actual development of the current banking industry, some city commercial banks and rural commercial banks are at the forefront of the market in terms of market position, business scale, internal control management, etc., even better than a few joint-stock banks. The inclusion of the pilot is conducive to the premise of controllable risks. Defuse non-performing assets in the banking industry.
At present, the way banks write off non-performing assets is showing a trend of "multi-point blossoming". In addition to the traditional write-off and collection, new channels such as batch transfer and fixed increase of "tie-in" non-performing assets are also widely used.
In the future, the banking industry needs to use a variety of means to deal with the rebound of non-performing assets.
Experts said that the banking industry should continue to enrich the means of disposal of non-performing assets, and comprehensively adopt methods such as write-off, collection, asset securitization, debt-to-equity swap, and batch transfer of non-performing assets of personal loans to mitigate risks.
Chen Yanqing, vice president of China Huarong, said that differences in non-performing asset transfer entities, industries and regions have begun to emerge.
Asset management companies should seize the opportunity of the new cycle of non-performing assets, enrich disposal methods, do a good job in industry and regional layout, and improve the quality and efficiency of disposal.
Facing the new situation of economic development and the new changes in the non-performing asset market, asset management companies will stick to their main business, actively play the dual role of preventing risks and resolving non-performing assets, and provide differentiated financial services to serve the development of the real economy.
Liang Si, a researcher at the Bank of China Research Institute, said: "Under the new situation, it is necessary to take multiple measures to speed up the disposal of non-performing assets, and actively optimize disposal methods and means to effectively reduce credit risks and maintain stable economic operation. It is necessary to attract more investors. Enter the non-performing asset market, and dispose of non-performing asset portfolios or asset packages through public auction, agreement transfer, bidding transfer, etc. Through market-based debt-to-equity swaps to help companies ease their operating burdens, and consider developing bailout funds, merger funds, etc. Participate in the disposal of non-performing assets by means of methods, and increase the rescue efforts for enterprises.”
Peng Jiang