Core Viewpoint - The article discusses the negative impact of non-performing loan (NPL) securitization on the profitability of commercial banks, emphasizing that it does not effectively reduce the NPL ratio as intended [2][19]. Summary by Sections Securitization Process - A bank issued a securitized product based on personal credit NPLs, with a total asset pool amounting to 1.2 billion yuan, including 1.11 billion yuan in principal and 90 million yuan in interest and fees [3][4]. - The expected total recovery from these NPLs over 2-3 years is 237 million yuan [3]. Cash Flow and Recovery Analysis - During the transition period, approximately 105 million yuan was recovered, accounting for 60.73% of the investment amount [5]. - In the year of issuance, 135 million yuan was recovered, representing 78.08% of the investment amount [6]. - Over the first year, a total of 204.5 million yuan was recovered, exceeding the investment amount of 172.9 million yuan [7]. Impact on NPL Reduction - The bank effectively reduced its NPLs by 1.82 billion yuan through securitization, but still had to write off a difference of 928 million yuan between the principal and the amount received [8]. - The article questions whether the cash flow received through securitization is genuinely "advanced," as the bank could have received similar amounts without securitization [9][10]. Long-term Recovery Comparison - Over a full year, the total recovery from the NPLs was significantly higher than the amount received through securitization, suggesting that not securitizing would have led to better NPL management [12]. - If the bank continues to issue securitized products annually, the effectiveness of this method in reducing NPLs diminishes over time [13]. Risk Classification and Profitability - Securitization leads to the loss of potential risk classification adjustments, as the underlying assets no longer belong to the bank, which could have been reclassified from non-performing to performing [18]. - The article concludes that the costs associated with securitization, including the need to write off non-compliant loans, negatively impact the bank's profitability [19][17]. Conclusion - Overall, the article argues that the perceived benefits of NPL securitization are misleading, as traditional methods of recovery and write-offs could achieve similar or better results without the associated costs and risks of securitization [19][20].

Core Viewpoint - The article compares two leading city commercial banks in Hebei, namely Hebei Bank and Tangshan Bank, highlighting their differences in ownership structure, financial performance, and operational efficiency [2][41]. Ownership Structure - Hebei Bank has 5,124 shareholders, with the largest being State Energy Group Capital Holding Co., Ltd. at 19.02% [3]. - Tangshan Bank has 1,624 shareholders, with the largest being Tangshan Port Industrial Group Co., Ltd. at 11.66% [4][5]. - Hebei Bank is a provincial-level city commercial bank, while Tangshan Bank is a municipal-level bank, indicating a difference in administrative ranking [6]. Capital Market - Both banks have not yet achieved stock market listings [7]. Operational Area - Hebei Bank operates 263 branches across 11 cities in Hebei and has two branches outside the province [8]. - Tangshan Bank focuses solely on the Tangshan area, with 78 branches [8]. Subsidiaries - Hebei Bank has two subsidiaries, while Tangshan Bank has none [9][10]. Employee Situation - As of the end of 2024, Hebei Bank employs 6,323 staff, with 15.58% holding postgraduate degrees, while Tangshan Bank has 1,642 employees, with 18.21% holding postgraduate degrees [11][12]. Financial Performance - As of the end of 2024, Hebei Bank's total assets are 569.6 billion, while Tangshan Bank's total assets are 352.3 billion [14]. - Hebei Bank's operating income is 13.725 billion, compared to Tangshan Bank's 6.827 billion [14]. - Hebei Bank's net profit attributable to shareholders is 1.956 billion, significantly lower than Tangshan Bank's 3.393 billion [14]. Asset Quality - Hebei Bank's non-performing loan (NPL) ratio is 1.50%, while Tangshan Bank's is 0.82% [15][32]. - The provision coverage ratio for Hebei Bank is 184.51%, compared to Tangshan Bank's 639.69% [15][34]. Profitability - Hebei Bank's net interest margin is 1.61%, lower than Tangshan Bank's 1.73% [16]. - Overall, Tangshan Bank demonstrates better operational efficiency and profitability compared to Hebei Bank [17][42]. Long-term Trends - Over the past decade, Hebei Bank has consistently maintained higher total assets and operating income than Tangshan Bank, but its profitability has fluctuated significantly [18][20][24]. - In 2024, Hebei Bank's net profit was only 57.65% of Tangshan Bank's [42]. Business Structure - Both banks primarily generate revenue from net interest income, with Hebei Bank experiencing a significant drop in this ratio in 2024 [25]. - The loan-to-asset ratio for both banks has been increasing, with Hebei Bank having a lower ratio compared to Tangshan Bank [27]. Salary and Benefits - Hebei Bank's total employee compensation in 2024 was 2.051 billion, while Tangshan Bank's was 697 million [39]. - However, the average salary at Tangshan Bank is higher due to its smaller workforce [39].

Core Viewpoint - The article argues that securitization is not an effective method for disposing of non-performing loans, despite its appearance of providing immediate liquidity and reducing the bank's non-performing loan balance [2][3]. Summary by Sections Securitization Process - A bank issued a securitized product based on personal credit non-performing loans, with a total principal amount of 11.10 billion yuan and an expected recovery of 2.37 billion yuan over 2-3 years [3][5]. - The securitized product was issued for 1.82 billion yuan, which is only 16.40% of the total principal amount [4]. Investor and Bank Perspectives - Investors are attracted to the securitized product because the expected recovery of 2.37 billion yuan exceeds the issued amount of 1.82 billion yuan, providing potential profit [6]. - The bank benefits from securitization by reducing its non-performing loan balance and receiving service fees for managing the loans post-securitization [7]. Profit Impact Analysis - The actual recovery from the securitized loans during the transition period was 1.05 billion yuan, which is 60.73% of the investment amount received [11]. - If the bank had not securitized, it could have potentially increased its profit by approximately 1.14 billion yuan through recovery and reversal of provisions [19][21]. Accounting and Provisioning - The securitized loans had a book value of 1.725 billion yuan after provisioning, and the profit from the securitization was only 0.004 billion yuan, indicating minimal financial benefit [16][19]. - The article highlights that the bank's profit from securitization is limited due to the high level of provisions already accounted for [20]. Long-term Implications - The article suggests that securitization may lead to a long-term negative impact on the bank's profitability, as future recoveries from the securitized loans will not contribute to the bank's profits [21]. - The potential for multiple securitizations could cumulatively result in significant profit losses for the bank [21].

Core Viewpoint - The article argues that while securitization is a financing tool, it is not suitable for banks to dispose of non-performing loans due to various inefficiencies and potential losses associated with the process [1][2][21]. Summary by Sections Principle Explanation - Securitization primarily generates returns for investors from the recovery of non-performing loans, which are still collected by the banks themselves, leading to a situation where banks effectively pay out a portion of their own recoveries to investors [1][2]. - The cash flow from securitized non-performing loans tends to be stable initially but decreases over time, which complicates the timing of cash recovery during the transition period before formal issuance [2][5]. - During the transition period, banks may only receive about 50% of the expected cash flow from the securitized assets, as the initial recoveries belong to the investors [5][6]. - The article highlights that banks often incur significant write-off resources when securitizing loans, which could be avoided through direct recovery methods [7][8]. Empirical Analysis - From 2021 to 2024, Postal Savings Bank issued 22 securitization products, with the total amount of non-performing loans disposed of and the corresponding cash received from securitization detailed in a table [11][12]. - The average cash recovery during the transition period reached approximately 47.8% of the securitization proceeds, demonstrating the inefficiency of the securitization process [14]. - The analysis shows that the cash recovery period for these products averaged around 367 days, indicating that banks could have achieved similar results through direct recovery without securitization [14][15]. Related Thoughts - The article discusses the motivations behind banks engaging in securitization, suggesting that intermediaries benefit financially from the process, which may lead to a lack of thorough cost-benefit analysis by the banks themselves [20][21]. - It emphasizes that while securitization is a common practice, it may not be the most effective method for managing non-performing loans, as banks could achieve better outcomes through direct recovery and write-off strategies [21][22].

Core Viewpoint - The article provides a comprehensive comparison between Chongqing Rural Commercial Bank and Chongqing Bank, highlighting their strengths and weaknesses in terms of financial performance, asset quality, and operational efficiency. Group 1: Background Information - Chongqing is the largest municipality in China by area, with a GDP of 3.22 trillion yuan in 2024, ranking 17th among all provinces and municipalities, and 3rd among the four municipalities [2] - Chongqing Rural Commercial Bank was established in 2008, evolving from various rural credit cooperatives [3] - Chongqing Bank was founded in 1996, originally as Chongqing City Cooperative Bank, and has undergone several name changes [5] Group 2: Shareholding Structure - As of June 2025, the top shareholders of Chongqing Rural Commercial Bank include Hong Kong Central Clearing Limited (22.07%) and several state-owned enterprises [4] - Chongqing Bank's major shareholders include Hong Kong Central Clearing Limited (33.75%) and other state-owned and private enterprises [5] Group 3: Capital Market and Operations - Both banks are listed in A+H shares, with Chongqing Rural Commercial Bank listed in Hong Kong in 2010 and on the Shanghai Stock Exchange in 2019, while Chongqing Bank was listed in Hong Kong in 2013 and on the Shanghai Stock Exchange in 2021 [7] - Chongqing Rural Commercial Bank has a more extensive branch network with 1,733 branches, while Chongqing Bank has 199 branches [8] Group 4: Financial Performance - In 2024, Chongqing Rural Commercial Bank had total assets of 1,514.94 billion yuan, significantly higher than Chongqing Bank's 856.64 billion yuan [12] - The net profit attributable to shareholders for Chongqing Rural Commercial Bank was 11.51 billion yuan, compared to 5.12 billion yuan for Chongqing Bank [12] - Chongqing Rural Commercial Bank's return on assets and return on equity are higher than those of Chongqing Bank, indicating better operational efficiency [12] Group 5: Asset Quality - As of 2024, Chongqing Rural Commercial Bank had a non-performing loan ratio of 1.18%, slightly better than Chongqing Bank's 1.25% [12][29] - The provision coverage ratio for Chongqing Rural Commercial Bank was 363.44%, significantly higher than Chongqing Bank's 245.08%, indicating stronger asset quality management [12][30] Group 6: Employee and Compensation Structure - As of 2024, Chongqing Rural Commercial Bank employed 14,542 staff, while Chongqing Bank had 5,337 employees [11] - Employee costs for Chongqing Rural Commercial Bank were 5.53 billion yuan, compared to 2.30 billion yuan for Chongqing Bank, but the average salary for Chongqing Bank employees was higher [36][41] Group 7: Long-term Trends - Over the past decade, Chongqing Rural Commercial Bank's total assets have consistently been higher than those of Chongqing Bank, although the gap has been narrowing [14] - Both banks experienced fluctuations in revenue growth, with Chongqing Rural Commercial Bank's revenue consistently higher but also showing a decreasing ratio compared to Chongqing Bank [16][18] Group 8: Conclusion - Overall, Chongqing Rural Commercial Bank demonstrates superior operational efficiency and asset quality compared to Chongqing Bank, despite having a larger workforce and higher employee costs [39][40]

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, with a total of 18,529 loans and 8,675 borrowers involved [3][4]. - The total principal amount of the underlying assets was 1.11 billion yuan, with an expected recovery of 237.33 million yuan over 33 months [3][4]. Issuance Details - The securitized product had a total issuance amount of 182 million yuan, with a senior tranche of 142 million yuan at a fixed interest rate of 2.38% [4][5]. - The expected maturity date for the senior tranche is January 26, 2024, with a legal maturity date of April 26, 2028 [5]. Recovery and Issuance Discrepancies - The article questions why only 182 million yuan was issued against a principal of 1.11 billion yuan, highlighting that the loans are non-performing and not all can be recovered [7]. - It also discusses why the expected recovery of 237 million yuan led to an issuance of only 182 million yuan, emphasizing the need to account for costs and investor returns [7]. Investor Interest - Investors are willing to purchase the securitized product because the expected recovery exceeds the amount invested, providing a potential profit margin [8]. Bank's Motivation for Securitization - The bank benefits from reducing its non-performing loan balance and receiving upfront cash from the securitization, which can enhance profits if the loans have been fully provisioned [9]. Critique of Securitization - The article argues that the cash received from securitization may be less than what could be recovered through traditional collection methods, especially when considering the transitional period where funds are not accessible to the bank [11][15]. - It highlights that the supposed time advantage of receiving cash earlier through securitization does not hold up under scrutiny, as the bank cannot freely use funds collected during the transitional period [15][17]. Alternative Solutions - The article suggests that traditional methods like write-offs and collections could effectively replace securitization, as they do not incur the same costs and risks associated with securitization [20][22]. - It emphasizes that banks can still manage their non-performing loans effectively without resorting to securitization, which may lead to negative impacts on profitability and loan classification [24][26].

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].