Multi-win: Successful Practices and Theoretical Reflections on Bulk Disposal of Bad Loans

Author: Zhang Shiming
Publisher:
Publish Date: 2005-02-01
Features: Non-performing loans are the source of risks and obstacles to progress for commercial banks, a fact widely recognized by the international financial community. In China, the issue of non-performing loans is an even greater barrier to the reform of commercial banks, especially state-owned commercial banks. With extraordinary wisdom and courage, the Tianjin Branch of the Industrial and Commercial Bank of China, with the support of various parties, pioneered an innovative approach by proposing to use future risk provisions to resolve current losses from non-performing loans. With approval from the State Council, it partnered with the Tianjin Municipal Government to comprehensively dispose of non-performing loans. In just over a year, it successfully settled a total of 27.83 billion yuan in principal and interest of non-performing loans, achieving a comprehensive recovery rate exceeding 30%, and realizing a win-win situation for banks, governments, and enterprises. This book provides the first detailed and in-depth disclosure of the entire process of this work, making it a valuable reference for the industry and academia. Non-performing loans are the source of risks and obstacles to progress for commercial banks, a fact widely recognized by the international financial community. In China, the issue of non-performing loans is an even greater barrier to the reform of commercial banks, especially state-owned commercial banks. The Tianjin Branch of the Industrial and Commercial Bank of China, with the support of various parties, pioneered an innovative approach by proposing to use future risk provisions to resolve current losses from non-performing loans. With approval from the State Council, it partnered with the Tianjin Municipal Government to comprehensively dispose of non-performing loans. In just over a year, it successfully settled a total of 27.83 billion yuan in principal and interest of non-performing loans, achieving a comprehensive recovery rate exceeding 30%, and realizing a win-win situation for banks, governments, and enterprises. This book provides the first detailed and in-depth disclosure of the entire process of this work, making it a valuable reference for the industry and academia.