Silver Grant expects a high recovery rate as it helps state banks tidy their books
Mainland asset repackaging specialist Silver Grant International Industries expects to reap up to $1 billion in profit selling non-performing assets and loans from China's state banks over the next two years.
Having secured a record 56.9 billion yuan transfer of distressed assets from China Cinda Asset Management last week at what appears a bargain price, the red chip is confident it can package the resource company and property-linked loans for sale.
'The next three to five years are the peak time for the disposal of non-performing assets on the mainland as the Ministry of Finance has targeted to sell off the 1.4 trillion yuan worth by the end of 2006,' said managing director Gao Jianmin.
'Those will be the golden days for Silver Grant and the disposal of non-performing assets will become our core business, contributing to at least 50 to 70 per cent of our net earnings.'
Last week's purchase was the largest transfer of distressed debts to either a domestic or foreign commercial entity since Beijing began using commercial means to dispose of bad bank assets almost four years ago.
