A Case Study In Disposal Of Non-performing Assets

For commercial banks in China,both the balance and the rate of non-performing loans entered a new rising period from 2012 after years of decline.From the view of current market situation,unlike last time,state-owed financial asset management companies are faced with huge challenges with more diversified asset transferors,more difficult disposition and more intense competition.Therefore,it's a critical research topic that how to effectively deal with large amount of distressed assets and thus maintain financial stability.First,we will introduce several different approaches to NPL disposal,including liquidation through bankruptcy,asset transfer and debt restructuring.Based on the cause of NPL and taking into account the financial condition,industry status and asset characteristics of debtors,state-owed financial asset management companies,as creditors,analyze the recoverable value among other factors like the time and cost to recover as well as social responsibilities,and then come to the conclusion that debt restructuring is the most effective way to deal with NPL disposal.Secondly,we will discuss internal and external solutions for practical problems that may be encountered during restructuring process,such as management and control,capital funding and efficient operation.Finally,through the case of HS estate non-performing asset,we will put forward our solutions on how to de-risk non-performing assets and maintain financial and social stability.In this paper,we start from introduction and comparison of different methods for disposal of non-performing financial assets in real estate industry.Based on a successful case of NPL disposal,we focus on how to handle high amount of NPL and problems that may occur and provide solution and references for similar cases.