On June 5th, Zhongyuan Bank's Pingdingshan branch released five pieces of information on the transfer of non-performing assets on the Silver Register Center, and at least 10 branches of the bank have carried out non-performing asset transfers this year. Experts believe that in recent years, commercial banks have continued to write off bad debts and maintain a stable level of NPLs. In the future, with the development of fintech and the expansion of channels for handling non-performing assets, there is still room for improvement in the bad loan ratio of the banking industry.
On June 5, Cailian Press reported (Reporter Shi Sitong) that under the pressure of rising bad loan ratios, Zhongyuan Bank has been carrying out intensive bad asset transfer business this year. On June 5, Zhongyuan Bank once again released five pieces of bad asset transfer information on the Yindeng Center, involving a total of unpaid principal and interest of 42.7444 million yuan.
In the view of industry analysts, in recent years, the regulatory authorities' attention to risks in key areas has continued to increase, and banks have been increasingly disposing of bad assets. This is conducive to easing their own asset quality pressure, further enhancing their risk resistance capabilities, and releasing more lending space.
According to rough statistics by Cailian Press reporters, as of now, about 30 banks have released nearly 200 pieces of bad asset transfer information on the Yindeng Center. Experts believe that as commercial banks have large write-offs, and the generation of bad assets remains stable, the industry's asset quality indicators will remain stable. With the development of financial technology and the broadening of channels for disposing of bad assets, there is still room for improvement in the non-performing loan ratio of the banking industry in the future.
As bad loan ratios rise again, 10 branches of Zhongyuan Bank have successively carried out bad asset transfers
Specifically, the bad asset transfer project of Zhongyuan Bank involves bad loans of the Pingdingshan Branch and five local companies, with a total unpaid principal and interest of 42.7444 million yuan. Just on the previous day, the Kaifeng Branch of the bank also released three pieces of bad asset transfer information, involving a total unpaid principal and interest of 179 million yuan.
Cailian Press reporters noted that Zhongyuan Bank has stepped up efforts to dispose of non-performing assets this year, frequently releasing relevant bad asset transfer projects. According to rough statistics, including the aforementioned two branches, Zhongyuan Bank has had at least 10 branches this year that have successively carried out the transfer of bad loans through the Yindeng Center, and the relevant projects are generally public bad loans.
Industry analysts believe that Zhongyuan Bank's intensive release of bad asset transfer projects is undoubtedly to increase the disposal of non-performing assets, ease asset quality pressures, release more lending space. He pointed out that the Bank's net income decreased in 2023, mainly due to narrowing net interest margins, increasing provisions, and other factors. As the domestic economy steadily recovers and corporate operations improve, actively increasing the disposal of non-performing assets will help improve bank profitability.
In fact, Zhongyuan Bank's non-performing loan ratio has long been at a relatively high level, and it has improved somewhat in recent years, but its non-performing loan ratio returned to above 2% at the end of last year.
Data shows that the Bank's non-performing loan ratios from 2019 to 2023 were 2.23%, 2.21%, 2.18%, 1.93%, and 2.04%, respectively. After several years of continuous decline, there have been indications of an increase in the ratio in recent times. Horizontally, at the end of 2023, the non-performing loan ratios for national commercial banks and urban commercial banks were 1.59% and 1.75%, respectively, and Zhongyuan Bank's non-performing loan ratio still remained relatively high in the industry.
At the same time, pressure on Zhongyuan Bank's performance is gradually emerging, with full-year operating income of 26.183 billion yuan and a year-on-year growth of 2.23% in 2023; attributable net profit of 3.221 billion yuan, a year-on-year decrease of 11.75%. Meanwhile, the Bank's net interest margin was 1.73%, down 33 bp from the previous year.
Continuously strengthen write-offs, around 30 banks have released nearly 200 transfer information
Since the beginning of the year, the transfer of bad assets in the banking industry has been active. According to rough statistics by Cailian Press reporters, as of now, about 30 banks have released nearly 200 pieces of bad asset transfer information on the Yindeng Center. These include national commercial banks such as China Construction Bank and Agricultural Bank of China, joint-stock banks such as Ping An Bank and China Everbright Bank, and many city commercial banks and rural credit institutions.
Wang Pengbo, chief analyst of CNI Xiangmi Lake Fintech Index, told Cailian Press reporters that in recent years, regulatory authorities have continued to increase their attention to risks in key areas. With the increase in market-oriented and diversified disposal methods, banks themselves are also constantly increasing their disposal of non-performing assets. At the same time, regulatory authorities continue to increase their efforts to investigate violations by financial institutions, which can further mitigate the accumulation of bad assets.
Meanwhile, Zheng Jiawei, chief analyst at Dongxing Securities Research Institute, pointed out that in recent years, the risk preferences of commercial banks have also been decreasing. In addition to meeting regulatory requirements, actively disposing of non-performing assets can help them quickly achieve risk clearance and thus improve yield levels. Especially in the period of economic downturn, the disposal of non-performing assets in the banking industry will accelerate the trend.
According to the latest research report from Dongxing Securities, at the end of the first quarter of this year, the non-performing rate of commercial banks was 1.59%, flat sequentially; the proportion of loan categories was 2.18%, down 2BP sequentially, and the asset quality indicators of commercial banks continued to be stable. On the one hand, the commercial bank's write-off efforts continue to be significant, and on the other hand, non-performing assets generation remains stable.
From the financial reports disclosed by state-owned banks, the continuous write-off and disposal of non-performing loans (0.65, 0.690.63, 0.55 trillion yuan) from 2020 to 2023; the calculated bad generation rate added back was 1.26%, 0.93%, 0.87%, and 0.71%, and the pressure on bad generation was reasonable.
Looking ahead, Zheng Jiawei believes that there is still room for the non-performing rate of the banking industry to decline in the future. On the one hand, with the development of financial technology and AI technology, banks' control over customer risks continues to increase; on the other hand, with the broadening of non-performing asset disposal channels, institutional banks have more diversified ways of disposing non-performing assets.