Bad debt manager China Cinda to help top regulator tackle peer-to-peer lending risks
Company confirms China Banking and Insurance Regulatory Commission met big four bad debt managers over platform collapses
China Cinda Asset Management, one of the country’s four biggest state-owned bad debt managers, said on Thursday it would “proactively” help the government tackle peer-to-peer (P2P) lending risks, after confirming China’s top financial regulator had recently met the big four asset management companies on the issue following several protests in the past few weeks by investors who had lost money on collapsed P2P platforms.
P2P risks are a social issue of great concern in China
“P2P risks are a social issue of great concern in China. As a professional company managing bad debt, we will proactively take part in tackling relevant risks and help the government address the issue,” Chen Yanqing, assistant to the company’s president, told the media on Thursday.
“We will leverage our professional advantages and offer services in dealing with bad debt, such as acting as custodians of P2P assets,” he said.
Chen said the company had already set up a special team and was conducting an in-depth investigation into the issue. “We are right now in the process of communicating with regulators and some local governments,” he said.
Cinda itself has had no involvement with P2P projects. Nor has it acquired any P2P platforms, added Chen.
The company also announced its interim result late on Wednesday, posting a 3 per cent year-on-year decrease in net profit to 8.62 billion yuan (US$1.26 billion) for the first six months of the year. Its revenue dropped by 9.6 per cent to 54.8 billion yuan.
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The big four asset management companies were established by the Chinese central government in 1999 to tackle bad loans in the banking system, with the firms leveraging funds from the Ministry of Finance and loans from the People’s Bank of China to buy bad debt from commercial lenders. The companies have since diversified their businesses, expanding into the acquisition and restructuring of distressed assets at non-financial institutions.