Study On The Disposal Of Non-performing Assets Of Bank Z Under The Situation Of New Normal

In May 2014,the concept of "new normal" was put forward for the first time,and it has become the endogenous demand of China's economic development to recognize,adapting to and leading the new normal.In the new normal period,China's economic growth is slowing down,and its development mode,economic structure and motive force are facing major adjustments.Supply-side reform and the "cutting overcapacity,destocking,deleveraging,reducing corporate costs and shoring up weak spots" have not only provided deep-seated impetus for the sound development of the banking industry,but also brought risks and pressures in the concrete implementation actions.The reject ratio of banking industry keeps rising.It is the tough task for defusing the reject business ratio,and the non-performing loan has been becoming the main risk faced by the banking industry.Bank Z was restructured and established less than 13 years,and its predecessor is a county-level urban credit cooperative in the coastal area.Bank Z makes good use of the national strategic policy of "developing inclusive finance".And after more than ten years development,bank Z has made great improvement in its deposit and loan scale,quality and the management level.But in recent years,the problems should not be ignored,such its asset size growth trend is slowing down,the operating income relying on deposit and loan spreads,and its profitability declining year by year.Under the new normal,the non-performing loan of bank Z presents the trend of increasing,and the provision coverage rate continued to be lower than the overall level of China's urban commercial banks.At the same time,the shortage of guarantees for non-performing loans,and the concentration of regions and industries could also increase the difficulty of the subsequent disposal.At present,the disposition of non-performing asset taken by bank Z could still be the relative traditional self-collection,litigation and recovery,interest waiver,debt restructuring,debt in kind,write-off and asset transfer and so on.As regard for the objective reasons about the readjustment of economic structure,financial environment reform,imperfect non-performing asset trading market,as well as some subjective factors,including its development foundation is still shallow,the innovation ability is insufficient and the core product operation is extensive.In the process of the disposal the non-performing assets of bank Z,there are problems such as passive disposal,long cycle,high cost,single means and low efficiency.In order to further increase the disposition ratio of the non-performing asset and to meet the demand of marketization and quantification of the disposal of non-performing assets,bank Z needs to follow the endogenous logic of recognizing,adapting to and leading the new normal,understanding the arduous task of disposing non-performing assets.It should coordinate the internal and external forces of the bank,and combine multiple strategies.Based on the former research and discussion,policy suggestion is put forward to accelerate the disposal of bank Z's non-performing asset:First,constantly strengthen the non-performing asset disposal team,optimize the disposal business process,and accelerate the resolution of existing non-performing assets.Second,it should strengthen the front-end construction and pay more attention to credit risk management as well as improve the internal control system to control the formation of new non-performing assets.Third,it should give full play to the role of the market and try to use market-oriented means such as asset securitization,debt-to-equity swap and the funds marketization measure to reduce non-performing loans scale,to strengthen cooperation with financial institutions such as asset management companies,to trust companies and insurance companies.And it should also actively to explore the introduction of Internet,big data and other advanced technologies to enrich the disposal channels of non-performing loans.Fourth,it should also form benign interaction with local government.With the help of relevant government departments,the collection of non-performing assets is strengthened while government intervention is reduced to form a benign interaction.At last,it could take full advantage of “new normal” to bring banking industry of long-term benefit.On the one hand,under the new normal,the government and supervision are bound to make continuous efforts to improve supporting mechanisms such as laws and regulations,accounting and taxation,and to expand the operation space of non-performing assets.On the other hand,under the new normal,it will generate a large number of new technologies,new products,new business forms and new business models which will help bank Z to expand the loan scale and achieve corner overtaking if it could grasp this opportunity.