Study On The Effect Evaluation And Optimization Selection Of The Non-performing Assets Disposal Methods Of Commercial Banks

The 2022 Government Work Report clearly stated that we should control the risks in the economic and financial fields and accelerate the disposal of non-performing assets,so as to enhance the basement of the financial system and keep the safety of the financial system.At present,the outbreaks of COVID-19 and the war between Russia and Ukraine brought the high commodity prices,and arose insufficient momentum of the world economic growth.The Chinese economy suffered the supply shocks,demand contraction and the weaker expectation which gradually accumulated debt risk and the Banks non-performing assets risk.Bank non-performing asset risk is a major inducement of the risk of the financial system,and relate to the safely operation of the financial system.The statistics show that in the past five years,Chinese commercial banks have disposed of a total of 11.9trillion yuan of non-performing assets,and the amount has been rising continuously.With the further adjustment of China’s economic structure,there is more risk in the non-performing assets of commercial banks.The original non-performing assets disposal institutions have limited disposal capacity,and the supply and demand are seriously asymmetric.The non-performing assets disposal methods become more and more flexible,from the traditional methods such as litigation recovery,write-off,bulk transfer to modern methods including debt restructuring and asset securitization.Then,what are the economic consequences of the different non-performing assets disposal methods? How to choose the disposal methods? The research on the above issues has a significance meaning for commercial banks to improve the effects of non-performing assets disposal,maximize the value of non-performing assets,and ensure the finance better serve the economy.This paper uses the multi-case analysis method to compare and analyze the effects of the non-performing assets disposal methods of the commercial banks,in order to reveal the advantages and disadvantages of different disposal methods;Basing these,the commercial banks should choose the appropriate disposal method of non-performing assets according to the debtors’ condition,the disposal effects,the non-performing assets characters and the commercial banks abilities,so as to achieve the optimal economic consequences.Firstly,this paper combs the current non-performing assets disposal methods of commercial banks in China,conducts theoretical analysis on the four basic disposal methods,and distills the problems in the existing non-performing assets disposal methods of commercial banks.Second,the analysis the city commercial banks,public banks,state-owned banks and rural commercial bank cases,reveals that the commercial banks should consider a variety of factors when they choose the disposal methods.Finally,through the comparative analysis of multiple cases,consider the efficient and efficiency,and the influence factors are finally clarified.The study found that commercial banks should focus on the following four factors when dealing with non-performing assets.First,the benefit and efficiency of different disposal modes are heterogeneous,Among the four disposal modes,debt restructuring has the highest repayment rate,even as high as 100%.Basing the disposal efficiency,the bulk transfer and asset securitization disposal mode has a short disposal cycle and has a certain time advantage,.Second,the characteristics of non-performing assets affect the choice of disposal mode.In the classification of the non-performing assets,the disposal modes for the loss assets is relatively narrow,generally recommended to use litigation recovery model.When the scale of assets disposal is large and important to commercial banks,the debt restructuring model can better realize the maximum value of non-performing assets;When the non-performing asset collateral has strong liquidity or the guarantor has strong repayment ability,the litigation recovery model and the debt restructuring model can achieve the optimal economic consequences.Third,the debtor’s business conditions and repayment willingness affect the choice of disposal mode.It is suggested that the debt restructuring mode should been priority selected in order to maintain productivity and promote stable economic growth when the debtor has strong repayment willingness and is only affected by temporary business difficulties and external factors.Finally,the scale,share structure and professional talents of commercial banks also influence the choice of non-performing assets disposal mode.For optimization selection the disposal mode of non-performing assets,commercial banks should first scientifically estimate the recoverable rate of non-performing assets,fully consider the mortgaged property and the repayment ability of the guarantor,and make adequate preparations for the optimization selection of disposal methods.Secondly,this paper provides an optimization model to select the disposal methods of non-performing assets.According to the applicable conditions of the disposal methods and their environments,commercial banks choose the optimal non-performing assets disposal method,and this paper also suggests that the commercial banks can improve the disposal efficiency by combining various disposal methods.Finally,in order to achieve the optimal disposal results,commercial banks must improve the assessment system of non-performing assets disposal responsibility,and avoid the waste of resources caused by hasty disposal.