China's four state-mandated bad loan clearing companies have retrieved more cash than expected as they completed the mission of disposing of all impaired policy loans carved out from state-owned banks eight years ago. By the end of last year, the four asset management companies - Cinda Asset Management, Huarong Asset Management, Great Wall Asset Management and Orient Asset Management - had disposed of a combined 1.21 trillion yuan worth of bad policy loans and recovered 211 billion yuan, the companies said. That was a retrieval rate of 17.43 per cent and 28.6 billion yuan more than the government's target, according to their statement released yesterday. 'The asset management companies were established after the Asian financial crisis at a time when the nation's banks had high bad loan ratios of 26 per cent, 30 per cent and more,' said Cinda president Tian Guoli. 'At that time, international financial organisations were all concerned that China would have a financial crisis.' The asset management firms were established in 1999 to receive 1.4 trillion yuan in bad loans from the Big Four state-owned commercial banks - Bank of China, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China. They took more loans in 2004 in preparation for the banks selling shares in Hong Kong and Shanghai. '[The carve-outs] effectively dealt with the banks' financial risks and were essential for their successful listings,' Mr Tian said. All bad policy loans were transferred from the banks at full face value and paid for with bonds implicitly underwritten by the Ministry of Finance. The asset management companies have said they are unlikely to ever be able to repay the principal of these loans but will be able to cover the interest payments. All four are trying to transform into comprehensive financial services companies and have bought more than one trillion yuan worth of additional bad loans from the banks in commercial transactions.