China Said to Agree $7.7 Billion of Bad Loan Securitization
- First quota since 2008 as soured loans rise to decade high
- Bank of China awaiting CBRC approval for first NPL sale
Chinese Stocks Tumble Most in a Month
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China will allow domestic banks to issue up to 50 billion yuan ($7.7 billion) of asset-backed securities based on their non-performing loans, the first quota for such sales since 2008, people familiar with the matter said.
The quota, which will initially be allocated mainly to China’s largest banks, will allow lenders to remove non-performing loans from their balance sheets at a time when asset quality is deteriorating and the economy is slowing, the people said, asking not to be named as the plan isn’t public. The first batch of asset-backed securities based on NPLs will be sold as early as the first half of this year, the people added.