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China expands bad loan securitization
China is set to allow some mid-sized banks to issue asset-backed securities with bad loans as underlying assets this year, providing them with a new channel to offload troubled debt, the official Shanghai Securities News reported on Wednesday. The banks will include China Minsheng Banking Corp, China Everbright Bank, China CITIC Bank Corp, Industrial Bank and Bank of Beijing, the newspaper reported, without providing its source of information. Chinese banks are under pressure to accelerate write-offs and disposals of more sour loans as the government looks to contain risks in the financial system after years of debt-fuelled stimulus. Total commercial bank nonperforming loans amounted to 1.51 trillion yuan ($219.49 billion) by the end of last year, accounting for 1.74 percent of total lending, official data showed, though many analysts believe the actual figure is much higher.
