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China expands bad loan securitisation scheme to include more banks - state media
April 19, 2017 / 4:40 AM / 5 months ago

China expands bad loan securitisation scheme to include more banks - state media

BEIJING, April 19 (Reuters) - China is set to allow some mid-sized banks to issue asset-backed securities (ABS) with bad loans as underlying assets this year, providing them with a new channel to offload troubled debt, the official Shanghai Securities News reported on Wednesday.

The banks will include China Minsheng Banking Corp , China Everbright Bank, China CITIC Bank Corp, Industrial Bank and Bank of Beijing, the newspaper reported, without providing its source of information.

Chinese banks are under pressure to accelerate write-offs and disposals of more sour loans as the government looks to contain risks in the financial system after years of debt-fuelled stimulus.

Total commercial bank non-performing loans (NPLs) amounted to 1.51 trillion yuan ($219.49 billion) by the end of last year, accounting for 1.74 percent of total lending, official data showed, though many analysts believe the actual figure is much higher.

Beijing first launched a trial programme early last year, granting six large state-owned lenders quotas to issue a maximum of 50 billion yuan worth of NPL ABS.

The six banks, which included Industrial and Commercial Bank of China, China Construction Bank , Agricultural Bank of China and China Merchants Bank , issued 14 NPL ABS last year, raising 15.61 billion yuan in total, according to the state media report.

The size of the programme will remain the same as 50 billion yuan after the inclusion of more lenders this year, the newspaper reported.

$1 = 6.8826 Chinese yuan renminbi

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