China's first prefecture-level city-based non-performing asset (NPA) bank has been founded in late December 2015 when some localities rushed to establish assets management companies to deal with sour assets.
As Securities Times reported Monday, a NPA bank was set up by China Everbright Group, China Investment and Assets Management Co., Ltd., Wenzhou Financial Investment Group and Wenzhou Industry Investment Group on December 30, 2015, with the first two holding together 55 percent equities and the last two in possession of 35 percent and 10 percent of the equities respectively.
The NPA bank is authorized to participate in wholesale transfer of NPA of financial enterprises in Zhejiang province, east China, restructuring, M&A, investment management consultancy services, business management, and financial consultancy.
In the meantime, four asset management companies (AMC) were founded to seek fortune in NPA business, with their shareholders including local financial holding firms, China's four big AMCs, national financial holding groups, and trust firms.
Others out of the business such as local financial exchanges, private capital management firms in Wenzhou, Zhejiang province and Wenzhou Financial Assets Exchange are also exploring ways of quoting banks' NPA for sale. Apart from them, the Internet finance section of China Huarong Asset Management Co., Ltd. and a peer to peer (P2P) online lending platform initiated by Guangdong's GDF assets management company are also eyeing NPA disposal business.
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