BEIJING, April 19 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
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
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
($1 = 6.8826 Chinese yuan renminbi)