Personal loans can be transferred in batches. How will institutions deal with them? Domestic asset management companies (AMC) previously mainly involved in corporate non-performing assets business. Four AMC management personnel told reporters that if the allocation of branches, they should also be based on the principle of commercialization. If the amount of individual non-performing loans is not large, it is likely to entrust commercial banks for disposal after acquisition. Local asset management companies have the advantages of localization, but there may also be a shortage of staff for the disposal of personal non-performing loans; whether to participate in business should also be judged according to their own actual situation.
Breaking through the restrictions on bulk transfer of personal non-performing loans
According to the notice on carrying out non-performing loan transfer pilot work and the implementation plan for non-performing loan transfer pilot project of banks (hereinafter referred to as the draft for comments) issued by the CBRC, this issue is only for comments, not the final document. The issuing objects include various banking regulatory bureaus, large banks, joint-stock banks, financial asset management companies, local asset management companies, financial asset investment companies, and banking credit asset registration and transfer centers.
According to the draft, there are 18 banks participating in the transfer of non-performing loans: six state-owned banks and 12 joint-stock banks. The pilot institutions involved in the acquisition of non-performing assets include: four AMCs, qualified local AMCs and five financial asset investment companies (AICS).
Among them, the local asset management company shall have good operation and management status, outstanding main business and good supervision and evaluation, and the local financial supervision and Administration Bureau shall issue the consent opinions. Local AMCs can accept non-performing loans from banks in their own provinces. In the future, regional restrictions will be released one by one according to the specific situation of local AMCs participating in the pilot and market demand.
Banks and acquisition institutions within the pilot scope shall participate in the pilot business in accordance with the principle of autonomy and voluntariness. Among them, the scope of personal loans involved in the pilot includes: personal consumption loans, housing mortgage loans, automobile consumption loans, credit card overdrafts, personal business loans.
During this years two sessions, Wang Tianyu, deputy to the National Peoples Congress and chairman of the board of Zhengzhou bank, suggested that the regulatory authorities should relax the regulations of asset management companies on the transfer of non-performing assets of commercial banks, allow asset management companies to transfer non-performing assets and personal operating loans that are more than 60 days overdue in accordance with the principle of substance over form, and ensure that commercial banks resolve risks in a timely and effective manner, Release the vitality of commercial banks to support the real economy.
According to the draft for comments, pilot banks need to determine the transfer standards and scope of non-performing loans according to their own conditions, formulate transfer plans for internal approval, and then conduct centralized registration in the bank registration center, carry out listing display, issue invitations to AMC, and then apply to the bank Registration Center for intended investors. The bank shall not set unreasonable conditions to exclude potential investors. Finally, the only transferee is determined by one bidding and multiple bidding.
Why personal non-performing loans are listed
Previously, non-performing personal loans could not be transferred to asset management companies in batches, so it was difficult to list them. However, after the transfer of personal non-performing loans, they can be listed in the bank. According to the notice of the Ministry of Finance and the CBRC on printing and distributing the measures for the management of batch transfer of non-performing assets of financial enterprises (CJ  No. 6), personal loans (including loans for purchase of houses, purchase of cars, education loans, credit card overdrafts, other consumer loans and other loans with individuals as the main borrowers) shall not be transferred in batch.
According to the above AMC management analysis, at that time, the state was to prevent individuals from escaping or withdrawing debts maliciously or collecting debts maliciously: the first was to worry about loans owed by individuals to banks, maliciously escaping or withdrawing debts; the second was that if asset management companies were transferred to social institutions, they were afraid that malicious collection would cause social problems. In addition, the management costs involved in personal loans are also relatively high. Generally, the amount of personal loans is small, unlike the amount of several hundred million in enterprises, and the disposal costs in asset companies are also high. The amount of non-performing assets has been relatively large, the economy will continue to decline and accelerate the exposure, so the banks are really hard to ask to lower the threshold. There are private AMC directors to analyze the reasons for the new regulations.
According to the information released by the CBRC, at the end of the first quarter of 2020, the non-performing loan balance of commercial banks was 2.61 trillion yuan, an increase of 19.6 billion yuan compared with the end of last quarter; the non-performing loan ratio of commercial banks was 1.91%, an increase of 0.05 percentage point compared with the end of last quarter.
The AMC management said that the banks personal non-performing loans can not be transferred to the outside world, are difficult to dispose of, and are difficult to offset in the statements. In the past two years, banks have been through the securitization of non-performing assets (ABS) and other ways, first of all, it is not good to value, because the number of households is very scattered. However, if it is not solved, the personal non-performing loans of commercial banks will always be on the balance sheet, and it is difficult to write them off; the non-performing loan balance accounted for by non transfer is reflected in the non-performing rate.
There are two kinds of ABS issued by banks: bad credit card and bad personal loan mortgage. By the end of 2019, the issuance scale of non-performing asset securitization in the whole year was 14.349 billion yuan, and the total number of issuance orders was 29, including 22 issuance of credit card non-performing asset securitization products, with a total amount of 6.902 billion yuan; 7 issuance of personal mortgage non-performing asset securitization products, with a total amount of 7.447 billion yuan.
In addition to issuing ABS, another way is to write off non-performing assets and write off non-performing assets to the balance sheet. However, the conditions for the cancellation of non-performing loans are strict, such as the death of the debtor. According to the measures of the Ministry of Finance for the management of the write off of bad debts of financial enterprises, in order to write off bad debts, it is necessary to explain in detail the reasons for the formation of bad debts, the remedial measures taken and the results, as well as the recourse to the borrowers and guarantors, the disposal of the mortgaged and pledged goods, etc., and to perform a set of strict legal procedures before write off.
According to the above AMC management, when a bank issues non-performing loan ABS, it is proposed that AMC make a bad investment, but AMCs internal decision-making process is difficult to pass, because it is difficult to evaluate and evaluate the recovery rate of the whole personal non-performing loan regardless of the amount of investment. For a company, it may be evaluated in five days, but a billion yuan of principal may involve thousands of households, so its very difficult to conduct door-to-door investigation, and the cost is too high.
How to digest a trillion bad personal market
The four AMCs have been focusing on corporate business, and there is no relevant department configuration in the disposal of personal non-performing loans. As for whether to set up the business of personal non-performing loans, the AMC management said that the institutions of the four asset companies are generally set up at the provincial level, but not at the county level. Personal loans are likely to be distributed across the country, and there are many problems that cannot be touched. If branches are allocated, they should also be based on the principle of commercialization. If the amount of personal non-performing loans is not large, it is likely to counter entrust commercial banks to dispose of them after the final acquisition.
What is the anti entrustment disposal? The management explained that the commercial bank may transfer a large number of personal non-performing assets to the asset management company, and then the asset company will counter entrust the commercial bank for disposal according to the principle of commercialization. After the transfer of commercial banks, the non-performing assets can be listed, and the asset companies can collect them at a discount. The asset management company either entrusts the original commercial bank to dispose, or entrusts the relevant organizations of the society to dispose.
For the disposal of personal non-performing loans. The second transfer is prohibited in the draft, which states that asset management companies should establish corresponding collection system and complaint handling system for personal loans, and equip corresponding institutions and talent teams. The asset management company can only dispose of the personal loans acquired in bulk by means of self clearing, entrusting a professional team to clear and reorganize, and may not transfer them to other countries again.
The pilot did not prohibit the entrusted collection, but clearly defined the management responsibility of the entrusting party to the collection agency, and set up preventive measures for the violent collection problem that was the most worried about by the policy liberalization. The prohibition of secondary transfer is concerned that after the acquisition of asset companies, they will be transferred to private investment institutions, which will use various means to collect money, which will also cause social problems. The above AMC management personnel said that the asset management company does not transfer, but can entrust the collection in the original commercial bank, the right belongs to the asset management company, and the non-performing loans in the commercial banks statement have been solved; in addition, AMC can entrust the social institutions, if the entrusted collection effect is good, give a certain agency fee, so as to solve the problem of the shortage of manpower in the asset management company.
Some analysts believe that local AMC may have more advantages in undertaking this business. In this regard, the above AMC management believes that local asset management companies have the advantages of localization, but there may also be a shortage of personnel for the disposal of personal non-performing loans; second, whether to participate in business should also be based on the judgment of their own business, according to the actual situation of each asset company.
Some local AMC business people told the economic observer that they had not received the relevant contents of the draft for comments. Some private AMCs want to participate in the market. Marseille believes that to activate the market of non-performing asset disposal, we need to break the barriers and let more private capital, foreign capital and disposal institutions participate. It is suggested to give non licensed AMC the right to purchase non-performing asset packages in batches.
Wang Tianyu also proposed to relax the market-oriented access standards for non-performing disposal and allow qualified non licensed asset management companies to undertake the non-performing asset package of commercial banks, so as to broaden the channels for non-performing disposal and speed up the disposal process.
In addition, the draft requires that no secondary transfer, no violent collection and no transfer of five types of non-performing loans shall be allowed after acquisition: loans made by state organs as debtors or guarantors, targeted poverty alleviation loans; policy oriented loans such as loans in deep poverty areas such as three districts and three prefectures; false personal loans, personal education loans, bank employees and relatives Loans in this bank; loans with restricted transfer clauses in loan contracts or guarantee contracts, etc.
Although the personal non-performing loan has been listed in the bank after the transfer, in terms of credit records, the opinion draft indicates that after the transfer of non-performing loan, the debtors rights and interests such as the change of bank credit records will be transferred to the transferee, and the transferee will decide whether to clear or change the non-performing credit records according to the subsequent settlement and disposal of creditors rights.