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Chinese banks are accelerating the sale of non-performing assets as the year draws to a close, including the disposal of collateral properties and goods from defaulting borrowers via various trading platforms.
This month, twenty financial institutions have put 92 non-performing assets up for sale through the banking credit asset registration and transfer system. The total outstanding principal and interest exceed 3 billion yuan (about $423 million), according to partial data from the platform.
Major banks such as the Industrial and Commercial Bank of China, Postal Savings Bank of China, Ping An Bank, and China Construction Bank are actively divesting NPAs worth hundreds of millions or even billions of yuan. These assets are being sold on both national and local online trading platforms, as well as specialized asset transfer systems.
Industry experts expect more financial institutions to offload NPAs as the year concludes. The final quarter is typically a peak period for asset transfers due to regulatory evaluations, with smaller and medium-sized banks under increased pressure to improve asset quality and profitability, analysts say.
For example, Bank of Nanjing is auctioning off a non-performing personal loan valued at over 800 million yuan (approximately $113 million). Meanwhile, Ping An Bank has listed nine NPAs with combined principal and interest exceeding 1.3 billion yuan ($183 million).
“Transferring NPAs allows banks to clear assets that have long tied up capital, are illiquid, and have negatively impacted their performance. It also helps improve their asset structure and overall quality, enabling better support for future growth,” explained an industry analyst.
As of June, China’s commercial banks had non-performing loans totaling 3.43 trillion yuan (around $483 billion), with the NPL ratio at 1.49%, according to regulatory data.
The sector is adopting more market-oriented ways to handle NPAs—selling them through trading platforms instead of the traditional bulk transfer to asset management companies. Since July 1, banks have also acted as landlords, selling properties and high-value goods transferred due to NPLs through online auctions.
Selling real estate collateral directly to individual buyers allows banks to reach more people and potentially shorten the recovery cycle, reduce transaction risks, and avoid legal complications. Experts note that properties sold directly than those auctioned judicially tend to have clearer ownership titles and lower prices compared to surrounding market rates.
Beyond property, some lenders are also disposing of other high-value collateral assets. For instance, branches of rural commercial banks in Inner Mongolia are selling items like baijiu liquor and art collections through various asset trading channels.
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