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SCMP Reporter

Last year's amount brings Agricultural Bank stale loans retrieved to 33.4b yuan

China Great Wall Asset Management, one of the mainland's  four bad debt clearing houses,  recovered 6.6 billion yuan in cash from selling  non-performing loans last year.

Great Wall said it had so far retrieved  33.4 billion yuan from selling 319.4 billion yuan worth of bad debts transferred from Agricultural Bank of China in 2000.

The asset management firm said total cash  retrieved already exceeded its target by 6.8 billion yuan.

Under an agreement with the Ministry of Finance, Great Wall will get 40 million yuan or 0.12 per cent of the total cash it recovers.

The remainder will be handed to the ministry which financed the establishment of the four debt-clearing  firms in 1999.

The ministry hopes that the four,  including Cinda Asset Management, Orient Asset Management and Huarong Asset Management,  had sold by the end of last year all loans transferred to them in 2000. The other three have not yet released their 2006 reports.

'The company will focus on selling 400 million yuan of bad loans it received in 2005 from the Industrial and Commercial Bank of China,' said Great Wall spokesman Wen Xiantang in Beijing.

China's non-performing loan market has become a buyer's market since the beginning of last year.

The four state-owned debt-clearing houses are in a rush to sell their non-preforming assets transferred from the Big Four banks and the  rise in supply made investors  reluctant to pay prices as high as before.

Facing a tougher market, asset managers have been trying different ways, such as partnerships with local governments or foreign parties  to dispose of their assets  to repay the debt and interests to the finance ministry.

Great Wall sold  bad loans worth 34 billion yuan in one batch in Liaoning,  more than  50 per cent of its portfolio in the province, to the  provincial government.

The State Council, expected to hold its annual finance conference  at the beginning of  this year, will review a proposal  by the finance ministry  on the future roles of the four bad-debt clearing houses.

The four  have all expressed hopes  of transforming themselves into diversified financial companies that can provide services such as investment banking and securities trading.

Great Wall has yet to  obtain its securities licence because it lacks experienced licensed employees.

Cinda, Huarong and Orient last year received licences to provide investment banking and securities trading services last year. But they are not allowed to invest their own money in securities because the regulator is concerned about the risks involved.

long road to clean balance sheets

Total cash already recovered by Great Wall exceeds the asset management company's target by 6.8 billion yuan

Great Wall will get 40 million yuan of the total cash it recovers from the loan sales while the rest will go to the finance ministry

The ministry hopes Cinda, Orient and Huarong had sold by the end of last year all loans transferred to them in 2000



Great Wall recovers 6.6b yuan of bad debt