City Commercial Bank Non-performing Asset Securitization

In recent years,China's economy has transformed from high-speed development to high-quality development,economic downturn and structural adjustment.The transformation of new and old industries has caused China's domestic financial risks to rise sharply.Non-performing asset securitization,as a means of disposing of nonperforming assets,has been used by many banks on a trial basis since its restart in 2016.Hangzhou Bank,as one of the three city commercial banks among the second batch of pilot banks,successfully issued "Qiantang's first phase of non-performing asset-backed securities in 2018" on October 22,2018.As the latest example of asset-backed securities issued by small and medium-sized city commercial banks,The transaction structure design,grade design,credit enhancement measures,and asset selection of the "Qiantang Phase I" can provide ideas and references for the third batch of larger pilot banks(including multiple city commercial banks and rural commercial banks).This article takes “Qiantang's first issue of non-performing asset-backed securities in 2018” as the research object.It first describes the current situation of non-performing assets in China,and compares the advantages and disadvantages of the eight ways banks currently handle non-performing assets.Then it introduces the current product situation and existing problems of non-performing asset securitization since its restart in 2016,and introduces the foreign non-performing asset securitization transaction model with the United States and South Korea as representatives.By introducing the main participants in this product issuance,transaction structure design,level design,credit enhancement measures,analysis of the causes of the issue,the product transaction elements,and the issuance effect,the enlightenment in the product issuance process in this period is summarized,and separately Suggestions at the micro-level and macro-level are provided at the operational and policy levels,including the combination of pooled assets and the improvement of the information disclosure mechanism,to provide a reference for later pilot banks.