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Beijing Business Daily (Reporter Li Haiyan) The scope of the pilot program for bad loan transfers is expected to be expanded. On August 25, Beijing Business Daily reporters noticed that recently, the Financial Regulatory Bureau mentioned in its reply to the representatives' suggestions that it would comprehensively consider the pilot program for bad loan transfers and other factors, study and introduce relevant systems, expand the scope of the pilot program or promote the normalization of the pilot program policy. In the view of analysts, with the innovation of domestic bad loan disposal models, the development of the domestic credit environment, the expansion of the supply and demand of bad loans, and more standardized and transparent information disclosure, the depth and breadth of the bank's bad loan disposal market will continue to increase.

It is understood that the pilot work on non-performing loans has officially started since 2021, which has enabled the transfer of single-household non-performing loans to enterprises and the bulk transfer of personal non-performing loans by banks to be "broken". However, the number of pilot institutions was relatively limited at that time, and the first batch of banks participating in the pilot were only 6 large state-owned banks and 12 national joint-stock banks.

Based on the original scope of pilot institutions, on December 30, 2022, the Office of the former China Banking and Insurance Regulatory Commission issued the "Notice on the Implementation of the Second Batch of Non-Performing Loan Transfer Pilot Work", which included urban commercial banks and rural small and medium-sized banks registered in Beijing, Hebei, Inner Mongolia, Liaoning, Heilongjiang, Shanghai, Jiangsu, Zhejiang, Henan, Guangdong and Gansu in the scope of pilot institutions.

In response to the suggestion of National People's Congress representative Wang Lisheng on encouraging and supporting the strengthening of provincial-level asset management companies to effectively dispose of non-performing assets of small and medium-sized financial institutions, the Inclusive Finance Department of the Financial Regulatory Administration stated that it will work with the Ministry of Finance to comprehensively consider the pilot situation of non-performing loan transfers, the business development of related enterprises, high-risk institutions and the demand for non-performing loan transfers and disposals, and study and introduce relevant systems, expand the scope of the pilot or promote the normalization of the implementation of pilot policies, and help banking financial institutions continuously expand the channels and methods for disposing of non-performing assets.

According to data from China Banking and Insurance Regulatory Commission, as of now, 713 banks and their branches have opened accounts for non-performing loan transfer business. In August alone, Jiangsu Yangzhou Rural Commercial Bank, Jiangsu Ganyu Rural Commercial Bank, Hebei Anguo Rural Commercial Bank, and Xingning Zhujiang Village Bank opened accounts for non-performing loan transfer business and joined the pilot "team".

From the perspective of NPL transfers, there are many personal NPL transfer projects, involving consumer loans, business loans, and credit card overdrafts. For example, on August 23, Ping An Bank issued two NPL transfer announcements for personal consumer and business loan transfer projects. The loans in the asset packages were all issued by Ping An Bank Wuhan Branch, involving a total outstanding principal and interest of 454 million yuan. Minsheng Bank also recently issued a NPL transfer announcement for credit card overdraft transfer projects, involving a total outstanding principal and interest of 999 million yuan.

It can also be seen from the bad loan transfer data in the second quarter that the transfer of bad loans has accelerated significantly. During the reporting period, the transaction volume of personal bad loan batch transfer business increased significantly, with 107 orders listed and a transaction volume of 27.85 billion yuan, a month-on-month increase of 282.14% and 547.67% respectively.

Zhou Maohua, an analyst at the Financial Markets Department of Everbright Bank, said that the growth of personal non-performing loans may be related to the macroeconomic fluctuations in recent years. The fluctuations in the operations of some market players or the increase in personal financial pressures have led to an increase in the non-performing loans of some personal consumer loans, business loans and credit cards. At the same time, it is also related to the rapid growth of credit loans of market players in recent years, the extensive operation of related businesses of a few institutions and the level of risk management.

However, compared with national banks, local small and medium-sized banks have relatively few non-performing loan transfer projects. Recently, Lintao Rural Commercial Bank in Gansu Province re-listed personal consumption and business loan transfer projects, involving a total outstanding principal and interest of 73.0136 million yuan.

Well-known economist Pan Helin believes that the transfer of non-performing loans by local small and medium-sized banks is rare, on the one hand because of the small size of small and medium-sized banks, and the small amount of their non-performing loans themselves, which cannot meet the buyers' expectations of scale. On the other hand, it is difficult for small and medium-sized banks to reach a consensus with buyers on the pricing of their non-performing loans, because the quality of their loan customers is slightly lower than that of large state-owned banks.

"Joining the non-performing loan market transfer team will help broaden the channels for small and medium-sized banks to dispose of non-performing loans, help reduce bad debts and improve bank asset quality, reduce bank losses, enhance bank credit capacity, optimize credit asset structure, and promote bank sound and sustainable operation." Regarding the subsequent trends in non-performing loan transfers, Zhou Maohua believes that judging from the trends, with the innovation of domestic non-performing asset disposal models, the development of the domestic credit environment, the expansion of non-performing asset supply and demand, and more standardized and transparent information disclosure, the depth and breadth of the bank's non-performing loan disposal market will continue to increase.