Core Viewpoint - The article argues that securitization is not an effective method for disposing of non-performing loans, despite being a financing tool [2][10]. Summary by Sections Securitization Example - Postal Savings Bank issued a securitized product based on personal credit non-performing consumer loans on October 18, 2022, with the asset pool being finalized on May 18, 2022 [2][4]. - The total amount of non-performing loans included in the securitization was 1.11 billion yuan, with an expected recovery of 237.33 million yuan over 33 months [3][4]. Asset Characteristics - The asset pool consisted of 18,529 loans from 8,675 borrowers, with a total principal amount of 1.11 billion yuan and interest and fees amounting to 90.91 million yuan [3]. - The average outstanding balance per borrower was 138,400 yuan, and the average expected recovery amount was 27,400 yuan [3]. Issuance Details - The securitized product had a total issuance size of 182 million yuan, with 142 million yuan in senior tranches and 40 million yuan in junior tranches [4][5]. - The senior tranche had a fixed interest rate of 2.38% and was rated AAAsf by China Chengxin International [5]. Recovery and Investor Interest - The expected recovery amount of 237.33 million yuan was gross and included costs associated with recovery efforts [7]. - Investors were willing to purchase the securitized product due to the potential for profit, as the expected recovery exceeded the amount invested [8]. Bank's Perspective on Securitization - The bank benefits from securitization by reducing its non-performing loan balance and receiving upfront cash, which can enhance profits if the loans are fully provisioned [9]. - The bank retains the role of loan servicer, allowing it to earn service fees from the recovery process [9]. Critique of Securitization - The article highlights that the cash received from securitization may be less than what could be recovered without it, as evidenced by the actual recovery amounts [11][14]. - The "transition period" during which cash flows are restricted limits the bank's ability to utilize funds effectively [15]. Long-term Implications - Over a longer time frame, the advantages of receiving cash upfront diminish, especially if the bank engages in rolling securitizations [18][19]. - The article argues that traditional methods of write-offs and recoveries could achieve similar results without the drawbacks of securitization [20][26]. Conclusion - Securitization is portrayed as a financing method that may not effectively address the underlying issues of non-performing loans, potentially leading to negative impacts on bank profitability and loan management [26].

Core Viewpoint - The article provides a comparative analysis of Hangzhou Bank and Ningbo Bank, highlighting their leading positions among city commercial banks in Zhejiang Province, and their significant roles in driving the province's economic growth [2]. Group 1: Background and Ownership - Hangzhou Bank was established in 1996 and has undergone several name changes, with its current name adopted in 2011. Its major shareholders include state-owned enterprises and private companies, with the largest shareholder holding 16.60% [3]. - Ningbo Bank was formed in 1997 and also underwent name changes, with significant foreign investment from Singapore's OCBC Bank in 2006. Its largest shareholder holds 18.74% [5]. Group 2: Capital Market - Both Hangzhou Bank and Ningbo Bank are publicly listed, with Hangzhou Bank listed on the Shanghai Stock Exchange since October 2016 and Ningbo Bank on the Shenzhen Stock Exchange since July 2007 [6][7][8]. Group 3: Operational Coverage - Both banks have established a presence across all 11 cities in Zhejiang Province. Hangzhou Bank has nearly 300 branches, while Ningbo Bank has 16 branches, with both banks having additional branches in major cities outside Zhejiang [10]. Group 4: Subsidiaries - Hangzhou Bank has one wholly-owned subsidiary and a joint venture in consumer finance, while Ningbo Bank has four subsidiaries, including wealth management and financial leasing companies [12]. Group 5: Employee Situation - As of the end of 2024, Hangzhou Bank has 14,409 employees, while Ningbo Bank has 26,976 employees, indicating a significant difference in workforce size [13][14]. Group 6: Financial Performance - In 2024, Ningbo Bank's total assets reached 3.13 trillion yuan, significantly higher than Hangzhou Bank's 2.11 trillion yuan. Ningbo Bank's operating income and net profit also surpassed those of Hangzhou Bank, with ratios of 1.74 and 1.60, respectively [16][17][21]. - Both banks maintain a similar asset quality, with non-performing loan ratios at 0.76% and high provision coverage ratios, indicating strong asset management [20][36]. Group 7: Long-term Trends - Over the past decade, Ningbo Bank has consistently outperformed Hangzhou Bank in total assets, with the gap widening from 1.23 times in 2016 to 1.48 times in 2024. Both banks have shown growth in operating income and net profit, but the growth rate of Ningbo Bank has been more pronounced [21][23][26]. Group 8: Business Structure - The majority of revenue for both banks comes from net interest income, with Ningbo Bank's proportion surpassing that of Hangzhou Bank in 2024. Both banks have seen an increase in the loan-to-asset ratio, though it remains below 50% [30][32]. Group 9: Quality of Assets - Both banks exhibit strong asset quality, with stable non-performing loan rates and declining overdue rates. Hangzhou Bank has improved its asset quality significantly over the years [36][41]. Group 10: Compensation and Benefits - Ningbo Bank's employee costs have consistently been higher than those of Hangzhou Bank, reflecting its larger workforce and higher profits. Average employee compensation for both banks is around 540,000 yuan [42][44].

Core Viewpoint - The overall non-performing loan (NPL) ratio of Chinese commercial banks is on a downward trend, reaching 1.50% by the end of 2024 and 1.49% by mid-2025, down from 1.96% in September 2020, indicating stable asset quality in the banking sector [2][3]. Summary by Sections Non-Performing Loan Ratio and Balance - The non-performing loan balance of commercial banks is increasing despite the declining NPL ratio, reaching 3.28 trillion yuan by the end of 2024 and 3.43 trillion yuan by mid-2025, compared to only 0.84 trillion yuan at the end of 2014 [3]. NPL Disposal Methods - Commercial banks are employing various methods to dispose of non-performing loans, including write-offs, asset securitization, and collections. For instance, in 2024, China Merchants Bank disposed of 62.902 billion yuan of NPLs, with 30.401 billion yuan through write-offs, 22.569 billion yuan through asset securitization, and 7.599 billion yuan through collections [6]. Write-Offs - Write-offs are a method where banks remove recognized bad debts from their balance sheets, thus lowering the NPL ratio without affecting current profits if provisions are sufficient. In 2024, write-offs accounted for 48% of all NPL disposals at China Merchants Bank [12]. Collections - Collections involve recovering loans from borrowers, which can occur even after loans have been written off. This process can be conducted internally by the bank or outsourced to collection agencies, utilizing various methods such as phone calls, in-person visits, or legal actions [13]. Debt-for-Asset Swaps - Debt-for-asset swaps occur when borrowers repay loans with non-cash assets like property or stocks. While this reduces NPLs, it introduces risks related to the subsequent sale of these assets, which may not yield expected cash returns [14]. NPL Transfers - NPL transfers involve selling bad loans at a discount to specialized institutions that manage distressed assets. This method allows banks to offload management costs and potentially recover more funds through experienced asset managers [16]. Restructuring - Restructuring is a process where banks modify loan terms for borrowers facing temporary difficulties, aiming to restore their repayment capacity. However, this method does not immediately reduce NPLs and may not be effective if borrowers do not recover financially [18][19]. Securitization - Securitization of NPLs is viewed as a financing method rather than an effective disposal strategy, with further discussion warranted on its implications [20].

Core Viewpoint - The article provides a comparative analysis of Jiangsu Bank and Nanjing Bank, highlighting their strengths, market positions, and financial performance, indicating that Jiangsu Bank has outperformed Nanjing Bank in several key financial metrics and is positioned as the largest city commercial bank in China as of mid-2025 [2][45]. Group 1: Background and Structure - Jiangsu Bank was established in January 2007 through the merger of city commercial banks in ten cities in Jiangsu Province, excluding Nanjing [3]. - Nanjing Bank was founded in 1996, evolving from 39 city credit cooperatives and has undergone several name changes and ownership changes, including foreign investments [4][6]. Group 2: Shareholding Structure - Jiangsu Bank's top shareholders include Jiangsu International Trust Co., Ltd. (6.98%) and Jiangsu Phoenix Publishing & Media Group Co., Ltd. (6.93%), both state-owned enterprises [4]. - Nanjing Bank's major shareholders include BNP Paribas (12.93%) and Nanjing Zijin Investment Group Co., Ltd. (10.92%), with significant foreign investment [6]. Group 3: Capital Market - Both banks are listed on the Shanghai Stock Exchange, with Jiangsu Bank listed since August 2016 and Nanjing Bank since 2007 [7][8][9]. Group 4: Operational Coverage - Both banks have achieved full coverage across 13 cities in Jiangsu Province, with Jiangsu Bank having 17 branches and 522 sub-branches, while Nanjing Bank has 16 branches and 289 outlets [11]. Group 5: Subsidiaries - Jiangsu Bank has four subsidiaries, including Su Yin Financial Leasing Co., Ltd. and Su Yin Wealth Management Co., Ltd. [12]. - Nanjing Bank has three subsidiaries and also holds stakes in three other companies, indicating a broader business scope [13]. Group 6: Employee Situation - As of the end of 2024, Jiangsu Bank had 20,780 employees, with 20.70% holding master's degrees, while Nanjing Bank had 18,045 employees, with 30.13% holding master's degrees [14]. Group 7: Financial Performance - In 2024, Jiangsu Bank's total assets reached 395.20 billion, with a net profit of 318.43 billion, while Nanjing Bank's total assets were 259.14 billion, with a net profit of 201.77 billion [15]. - By mid-2025, Jiangsu Bank's total assets increased to 478.85 billion, while Nanjing Bank's reached 290.14 billion, indicating Jiangsu Bank's growth trajectory [15]. Group 8: Long-term Trends - Over the past decade, Jiangsu Bank's total assets have consistently been about 1.5 times larger than those of Nanjing Bank, with both banks showing growth [19]. - Jiangsu Bank's operating income has also consistently exceeded that of Nanjing Bank, with a growing margin from 1.18 times in 2016 to 1.61 times in 2024 [21]. Group 9: Asset Quality - Both banks maintain strong asset quality, with non-performing loan ratios below 0.9% and high provision coverage ratios exceeding 300% [18][34]. - Jiangsu Bank's provision coverage ratio has improved significantly from 192.06% to over 350% [35]. Group 10: Compensation and Benefits - Jiangsu Bank's employee costs have consistently been higher than those of Nanjing Bank, with average salaries of approximately 560,000 and 530,000 respectively [42][43].

Core Viewpoint - The article compares two local urban commercial banks in Gansu Province, Gansu Bank and Lanzhou Bank, analyzing their strengths and weaknesses in various aspects such as ownership structure, financial performance, and asset quality [2]. Ownership Structure - Gansu Bank was established in September 2011 through the merger of two city commercial banks, with significant contributions from state-owned enterprises [3]. - The top ten shareholders of Gansu Bank include several provincial state-owned enterprises, with the largest shareholder holding 17.63% [4]. - Lanzhou Bank was formed in 1997 and restructured into a joint-stock bank, with its top ten shareholders primarily consisting of local government and private enterprises [5][6]. Capital Market - Gansu Bank was listed on the Hong Kong Stock Exchange in January 2018, while Lanzhou Bank was listed on the Shenzhen Stock Exchange in January 2022 [7][8][9]. Operational Coverage - Both banks have achieved full coverage across all 14 cities in Gansu Province, with Gansu Bank having a larger number of branches and a significant presence in rural areas [10]. Subsidiaries - Gansu Bank controls a village bank, while Lanzhou Bank has a financial leasing company under its umbrella [11][12]. Employee Situation - As of the end of 2024, Gansu Bank has 4,595 employees, with 9.01% holding master's degrees, while Lanzhou Bank has 4,280 employees, with 11.57% holding master's degrees [13][14]. Financial Performance - In 2024, Gansu Bank's total assets were 414.71 billion, while Lanzhou Bank's were 486.29 billion, indicating Lanzhou Bank's superior scale [15]. - Lanzhou Bank's operating income and net profit in 2024 were significantly higher than those of Gansu Bank, with net profit being 3.24 times greater [15]. - Both banks have seen fluctuations in their financial performance over the years, with notable declines in profits in 2019 [23][24]. Asset Quality - Lanzhou Bank has better asset quality indicators, including lower non-performing loan ratios and higher provision coverage ratios compared to Gansu Bank [16][34]. - Both banks' asset quality is below the national average for commercial banks, indicating ongoing challenges [41]. Business Structure - The majority of both banks' revenue comes from net interest income, although this proportion has decreased in recent years [26]. - Gansu Bank's loan-to-asset ratio has increased over the past decade, while Lanzhou Bank's has remained stable [27]. Salary and Benefits - Lanzhou Bank has higher employee costs and average salaries compared to Gansu Bank, despite having fewer employees [38][42].

Core Viewpoint - The article discusses the current state of personal housing loans in China, highlighting the significant role of major banks in this sector and the rising non-performing loan (NPL) rates due to a sluggish real estate market [2][3][4]. Group 1: Personal Housing Loan Balances - As of June 2025, the total personal housing loan balance in China reached 37.74 trillion yuan, with the top eight banks accounting for 73.17% of this total [2]. - The major banks' personal housing loan balances as of June 2025 are as follows: Industrial and Commercial Bank of China (ICBC) at 6.05 trillion yuan, China Construction Bank (CCB) at 6.15 trillion yuan, and Agricultural Bank of China (ABC) at 4.93 trillion yuan [3][4]. Group 2: Non-Performing Loan Rates - The NPL rate for personal housing loans at ICBC increased to 0.86% by June 2025, up from 0.73% at the end of 2024, marking a significant rise over the past five years [4][5]. - Other major banks also reported NPL rates exceeding 0.7%, indicating a widespread issue across the banking sector [5]. Group 3: Measures to Address NPLs - In response to rising NPLs, banks have increasingly turned to the securitization of personal housing loans as a means to manage these assets [8][11]. - The number of securitization projects has grown from 6 in 2020 to 29 in 2024, with 19 projects already completed in the first half of 2025 [8][13]. - The total amount of personal housing NPLs disposed of through securitization reached 70.11 billion yuan in 2024, with 49.59 billion yuan disposed of in the first half of 2025 [11][14]. Group 4: Impact on Housing Market - The increase in securitization and the corresponding rise in the number of disposed loans suggest that banks may become significant sellers of housing, potentially impacting housing prices negatively [16][26]. - The number of housing units associated with disposed NPLs reached 83,779 in the first half of 2025, indicating a substantial volume of properties being sold off [16][26].

Core Viewpoint - The article compares two local commercial banks in Hubei Province, Hubei Bank and Hankou Bank, analyzing their backgrounds, financial performance, and operational metrics to determine which bank is superior [2][3]. Group 1: Background and Ownership - Hubei Bank was established in early 2010 through the merger of five city commercial banks in Hubei Province [3]. - The top shareholders of Hubei Bank include state-owned enterprises such as Hubei Hongtai Group (19.99%) and Hubei Transportation Investment Group (17.64%) [3]. - Hankou Bank originated from the Wuhan City Cooperative Bank established in 1997 and was renamed in 2008 [3]. - The top shareholders of Hankou Bank include Wuhan Financial Holding Group (11.62%) and Lenovo Holdings (11.10%) [5]. Group 2: Capital Market Status - As of now, neither Hubei Bank nor Hankou Bank is listed on the capital market [6]. Group 3: Operational Scope - Hubei Bank has 269 branches covering all 17 cities and 59 counties in Hubei Province, with no branches outside the province [7]. - Hankou Bank has 217 branches, with 147 located in Wuhan, and has established a branch in Chongqing [7]. Group 4: Subsidiaries - Hubei Bank holds a 31.91% stake in a consumer finance company [8]. - Hankou Bank controls two rural banks and has a 25% stake in a financial leasing company [8]. Group 5: Employee Metrics - Hubei Bank employs 5,952 staff, with 9.66% holding master's degrees or higher [9]. - Hankou Bank has 5,190 employees, with 18.02% holding graduate degrees or higher [10]. Group 6: Financial Performance - As of 2024, Hubei Bank's total assets are 523.11 billion, while Hankou Bank's total assets are 554.85 billion [12]. - Hubei Bank's net profit attributable to shareholders is 26.58 billion, significantly higher than Hankou Bank's 10.55 billion [12]. - Hubei Bank's non-performing loan ratio is 1.95%, better than Hankou Bank's 2.87% [14]. Group 7: Long-term Trends - Over the past decade, Hankou Bank's total assets have consistently exceeded those of Hubei Bank, but Hubei Bank's growth rate has been faster, reducing the gap from 64.55% in 2019 to 94.32% in 2024 [15]. - Hubei Bank's operating income has surpassed Hankou Bank's since 2019, with Hankou Bank's income at only 87% of Hubei Bank's in 2024 [17]. Group 8: Business Structure - Both banks primarily generate revenue from net interest income, but Hubei Bank's reliance on this has decreased from 95.39% in 2018 to 73.83% in 2024 [22]. - Hubei Bank's net interest margin has declined from 2.61% in 2020 to 1.62% in 2024, while Hankou Bank's has increased slightly from 1.02% to 1.33% [24]. Group 9: Asset Quality - Both banks have high non-performing loan ratios, with Hubei Bank's being lower than Hankou Bank's [29]. - Hubei Bank's provision coverage ratio is 236.22%, significantly higher than Hankou Bank's 148.66% [14][33]. Group 10: Compensation and Employee Costs - Hankou Bank's total employee cost in 2024 is 1.754 billion, higher than Hubei Bank's 1.694 billion, leading to a higher average salary at Hankou Bank [36].

Core Viewpoint - The article discusses the current state of housing loans in major banks amid declining housing prices, highlighting the significant loan balances and the rising non-performing loan rates in the context of a cooling real estate market [2][14]. Group 1: Housing Loan Balances - The "Big Six" banks have substantial personal housing loan balances, with Industrial and Commercial Bank of China (ICBC) and China Construction Bank (CCB) each exceeding 6 trillion yuan, while Agricultural Bank of China (ABC) is close to 5 trillion yuan, and Bank of China (BOC) is just over 4 trillion yuan [3][4]. - As of June 2025, the personal housing loan balances for the "Big Four" banks (ICBC, CCB, ABC, and BOC) have decreased compared to the end of 2024, with ABC seeing a reduction of 49.16 billion yuan and CCB a decrease of 42.36 billion yuan [12][13]. Group 2: Loan Quality and Non-Performing Rates - The asset quality of housing loans remains strong, with non-performing loan (NPL) rates for personal housing loans significantly lower than overall loan NPL rates. For instance, ICBC's personal housing loan NPL rate was only 0.86% as of June 2025, compared to an overall rate of 1.33% [6][7]. - However, there is a noted increase in the NPL rates for personal housing loans across the "Big Six" banks from the end of 2024 to June 2025, indicating a trend of rising asset quality pressure [6][14]. Group 3: Market Trends and Implications - The decline in housing loan balances among the "Big Four" banks reflects the end of the booming real estate market, suggesting a shift in lending dynamics as housing prices remain low [12][14]. - Despite personal housing loans being a relatively safer loan category, the increasing NPL rates signal potential challenges ahead for banks as the real estate market continues to struggle [14].

Core Viewpoint - The average housing prices in many provinces have returned to levels seen in 2017, indicating a stabilization in the real estate market across various regions of China [2][3][5][8][10][13][14][18][20][23][25][28][30][33][35][38][39][43][45][48][50][53][55][58][60][63][66][69][71][74][76]. Summary by Region North China - Beijing's average new housing price in the first half of 2025 is approximately 32,213 CNY per square meter, returning to around 2017 levels [2] - Tianjin's average new housing price is about 14,250 CNY per square meter, back to early 2017 levels [3] - Hebei's average new housing price is around 7,901 CNY per square meter, reverting to early 2020 levels [5] - Shanxi's average new housing price is approximately 6,954 CNY per square meter, returning to early 2018 levels [8] - Inner Mongolia's average new housing price is about 6,269 CNY per square meter, back to late 2019 levels [10] Northeast China - Heilongjiang's average new housing price is approximately 6,051 CNY per square meter, returning to early 2017 levels [13] - Jilin's average new housing price is around 6,471 CNY per square meter, reverting to early 2018 levels [14] - Liaoning's average new housing price is about 7,800 CNY per square meter, back to early 2019 levels [18] East China - Shandong's average new housing price is approximately 7,740 CNY per square meter, returning to early 2019 levels [20] - Jiangsu's average new housing price is around 9,887 CNY per square meter, reverting to mid-2018 levels [23] - Shanghai's average new housing price is about 42,168 CNY per square meter, back to mid-2021 levels [25] - Zhejiang's average new housing price is approximately 15,440 CNY per square meter, returning to 2019 levels [28] - Anhui's average new housing price is around 6,786 CNY per square meter, reverting to early 2018 levels [30] - Fujian's average new housing price is about 10,366 CNY per square meter, back to mid-2018 levels [33] Central South China - Henan's average new housing price is approximately 6,331 CNY per square meter, returning to early 2019 levels [38] - Hubei's average new housing price is around 7,696 CNY per square meter, reverting to 2017 levels [39] - Hunan's average new housing price is about 5,862 CNY per square meter, back to early 2019 levels [43] - Guangdong's average new housing price is approximately 15,403 CNY per square meter, returning to 2020 levels [45] - Guangxi's average new housing price is around 5,384 CNY per square meter, reverting to early 2017 levels [48] - Hainan's average new housing price is about 16,649 CNY per square meter, back to 2020 levels [50] Southwest China - Chongqing's average new housing price is approximately 6,623 CNY per square meter, returning to early 2017 levels [53] - Sichuan's average new housing price is around 8,405 CNY per square meter, showing significant fluctuations [55] - Yunnan's average new housing price is about 6,538 CNY per square meter, reverting to early 2018 levels [58] - Guizhou's average new housing price is approximately 5,443 CNY per square meter, back to mid-2018 levels [60] Northwest China - Shaanxi's average new housing price is around 10,428 CNY per square meter, returning to mid-2023 levels [66] - Gansu's average new housing price is approximately 5,911 CNY per square meter, reverting to 2018 levels [69] - Ningxia's average new housing price is about 6,296 CNY per square meter, back to early 2020 levels [71] - Qinghai's average new housing price is around 6,762 CNY per square meter, reverting to early 2019 levels [74] - Xinjiang's average new housing price is approximately 5,942 CNY per square meter, returning to 2018 levels [76]

Core Viewpoint - The article discusses the decline in housing prices across various cities in China, highlighting the changes in new and second-hand residential property prices since September 2021, and provides insights into the current state of the real estate market based on statistical data from the National Bureau of Statistics [2][3][10]. Group 1: New Housing Price Trends - From the new residential sales price index of 70 major cities, new housing prices have shown a continuous month-on-month decline since September 2021, with a slight positive growth observed in the first five months of 2023 [3][10]. - The decline in new housing prices is more pronounced in third-tier cities, which began experiencing negative month-on-month growth from September 2021, while second-tier cities started this trend in October 2021, and first-tier cities followed in September 2022 [5][10]. Group 2: Second-Hand Housing Price Trends - The second-hand housing market has also seen a continuous month-on-month decline since September 2021, with a greater decrease in prices compared to new homes [7][9]. - Similar to new housing, first-tier cities have shown relatively stronger price stability compared to second and third-tier cities, with significant declines starting later and being less severe [9][10]. Group 3: Sales Volume and Average Price Analysis - In the first half of 2025, the national new commodity housing sales area was approximately 45.851 million square meters, down 3.5% year-on-year, while the sales amount was 442.41 billion yuan, down 5.5% year-on-year [11][12]. - The average price of new commodity housing in the first half of 2025 is estimated to be around 9,649 yuan per square meter, which is comparable to the average price from five years ago [11]. - The average price of new residential housing is approximately 10,128 yuan per square meter, indicating a return to levels seen 4-5 years ago [12]. Group 4: Regional Price Variations - In Zhejiang, the average price of new commodity housing in the first half of 2025 is about 15,440 yuan per square meter, returning to 2019 levels [14]. - In Jiangsu, the average price is approximately 9,887 yuan per square meter, reflecting levels from the first half of 2018 [17]. - Other provinces such as Guangdong, Yunnan, and Sichuan also show average prices returning to levels from previous years, indicating a widespread trend across different regions [18][20][21].