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Deluge of Soured-Loan Sales Expected This Year

Guo Mingjie, vice president of GI Technologies Group, said prices of nonperforming-loan packages will likely peak in June and drop 20% to 30% overall from 2017 levels by the end of 2018. Photo: VCG
Guo Mingjie, vice president of GI Technologies Group, said prices of nonperforming-loan packages will likely peak in June and drop 20% to 30% overall from 2017 levels by the end of 2018. Photo: VCG

More packages of bad loans are expected to flow into the market and push prices down this year, a number of industry insiders have told Caixin.

The four national asset management companies (AMCs) will need to speed up their disposal of bad loans and may choose to sell some in bulk, Jinzhuo Asset Management Co. Chairman Liu Lü said at an industry conference on Thursday.

Late last year, regulators tightened rules for AMCs, reiterating a minimum capital adequacy ratio of 12.5%, while setting adequacy ratios for core capital and tier-one capital that are higher than requirements at commercial banks. Capital adequacy ratios are a measure of how much capital companies must hold as a percentage of their risk-weighted assets.

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