Banks and consumer finance companies accelerate bad debt clearance in Q1, with "short aging" assets and "floor price" transactions appearing simultaneously.

On March 24, 兴业消费金融 posted two announcements on the Banking Credit Asset Registration, Transfer and Trading Center (hereinafter referred to as the Yindeng Center) regarding the transfer of individual non-performing loans. The total outstanding principal and interest in both cases exceeded RMB 1 billion each; combined, the scale surpassed RMB 2 billion, involving more than 20,000 loans that had already been classified as “loss.”

Just that same day, the Yindeng Center updated a total of 15 non-performing loan transfer announcements. The transferring parties also included multiple national banks such as Bank of China and Postal Savings Bank, as well as Ping An Bank.

Since the start of this year, large-asset packages being listed for sale have become the norm. Data show that from the beginning of the year to late March, the number of non-performing loan transfer announcements issued by the Yindeng Center had already exceeded 370.

The Policy Window Extended

The surge in market activity stems from clear policy expectations. On December 29, 2025, the National Financial Regulatory Administration officially issued a notice extending the pilot period for non-performing loan transfers to December 31, 2026. This is the second extension of the pilot since it began in 2021, giving a reassuring “stability check” to financial institutions’ plans for medium- to long-term asset disposal strategies.

At the same time, the Yindeng Center, as the operating platform, also rolled out tangible cost-reduction measures. Starting January 1, 2026, it will continue to temporarily exempt listing service fees for non-performing loan transfer business, and provide an 20% discount (i.e., 8折) on transaction service fees. This “extension + fee reduction” package substantially lowers compliance disposal costs and operational thresholds for financial institutions.

Warm policy signals rapidly translated into market action. At the start of 2026, consumer finance companies became the most active supply-side players in the market. In just January, leading institutions such as China Merchants Union Consumer Finance, Bank of China Consumer Finance, and Ant Consumer Finance intensively listed assets on the Yindeng Center. The total outstanding principal and interest involved exceeded RMB 11 billion, accounting for nearly 70% of the total outstanding principal and interest value of new monthly listings.

Among them, on January 23, China Merchants Union Consumer Finance listed five consumer-loan non-performing loan asset packages in one go, with a total outstanding principal and interest of approximately RMB 6.27 billion. For all asset packages, the weighted average delinquency days exceeded 1,500 days. Ant Consumer Finance, meanwhile, listed two individual non-performing loan tranches on January 29, with a combined outstanding principal and interest of RMB 2.37 billion.

Entering March, the fact that 兴业消费金融 listed more than RMB 2 billion worth of asset packages in a single day was only the latest peak. Earlier, on March 4, China Post Consumer Finance listed an individual consumer-loan non-performing loan asset package with total outstanding principal and interest of RMB 919 million. Changcheng Wubaqi Consumer Finance also concentrated the listing of four project tranches on March 17, with total outstanding principal and interest reaching RMB 1.719 billion.

On March 11, China Construction Bank once listed 10 non-performing loan transfer announcements, involving multiple branches in Zhejiang, Henan, Jiangsu, and others. On March 20, CITIC Bank’s Tianjin branch listed an individual consumer-loan non-performing loan asset package with total outstanding principal and interest of RMB 112 million. In the same recent period, Industrial and Commercial Bank of China’s Suzhou branch, Huaxia Bank’s Beijing branch, and others have also launched non-performing asset transfer projects with a scale of several hundred million yuan.

A professional in non-performing asset disposal noted that consumer finance business has characteristics such as deeper customer penetration, a focus on credit loans, and a relatively shorter business cycle; amid fluctuations in the economic cycle, its asset quality is more likely to come under pressure first. Accelerating the transfer of non-performing assets helps consumer finance companies quickly recoup funds, reduce provisioning pressure, and optimize financial statements—thereby freeing up space for subsequent business expansion.

Urgency of Disposal Becomes Prominent

Different from the “bad debts” long accumulated from earlier transfers, the asset packages emerging in the current market show a clear “short delinquency/short account age” profile, reflecting the urgent disposal needs of the transferor. For example, in 2026, a non-performing individual business loan asset package listed by the Guangdong branch of China Construction Bank had weighted average delinquency days of only 145.47 days.

“Rapidly divesting assets with shorter delinquency periods that have not yet fully settled—this is a proactive risk-management behavior under a stop-loss mindset.” A professional from an asset management department at a commercial bank in the western region interpreted this, suggesting that two considerations may be behind it: first, internal collections resources are limited, so facing delinquent accounts that grow in the short term, the batch-transfer approach is more efficient; second, the expected future cash recovery rate will decline as time passes, so it is better to transfer earlier to lock in part of the recoverable value and avoid further deterioration of asset quality.

The concentrated release of supply quickly reshaped the market’s supply-demand relationship, leading to broad pressure on transfer prices and frequent “floor-price” transfer behavior. Public information shows that for a non-performing asset involving eight corporate clients with a book value of RMB 1.421 billion, a non-performing asset of Shanxi Merchants Bank was ultimately sold to a related party, JinYang Asset Management Co., Ltd., at a price of RMB 310 million, for a discount rate as low as 2.18折. Market data indicate that the average discount rate for batch transfers of individual non-performing loans has already moved from the 2–3折 level at the beginning of the pilot to about 4.1折 in the first quarter of 2025. Intense price competition places extremely high demands on the transferee’s ability to value and price and on cost-control capabilities.

At the same time, requirements from transferors toward transferees have become increasingly strict and more finely detailed. In multiple transfer announcements, Changcheng Wubaqi Consumer Finance explicitly stated that transferees must have professional in-house debt-collection teams, a comprehensive complaint-handling mechanism, and a complete asset management system. The aforementioned professional believes these clauses are intended to standardize disposal behavior after the transfer of assets, protect the lawful rights and interests of financial consumers, and also serve as necessary measures for the transferor to isolate risks and prevent reputation and legal risks arising from improper collections. Against the backdrop of increasingly stringent regulatory requirements for protecting consumer rights and interests, compliant disposal has become the “lifeline” for market participants.

The Market Faces Three Challenges

With the pilot extended, industry consensus is that the non-performing loan transfer market will gradually move away from the “sprint-style disposal” model driven by policy uncertainty at the end of 2025, and shift toward an “institutionalized, market-oriented” operating phase. A research report from Cathay Haitong Securities shows that in 2025, across the full year, the non-performing loan transfer business announcements and listed projects on the Yindeng Center involved a total outstanding principal and interest of RMB 432.9 billion, up 58.8% year over year. This indicates that the transfer of non-performing assets is becoming an important liquidity-management and risk-resolution tool for financial institutions—especially those with a high share of retail business.

However, behind the rapid expansion of market scale, challenges cannot be ignored. A professional in asset management summarized that the market currently faces three major challenges.

First is the valuation challenge. Individual loan non-performing assets have inherent characteristics of being “small in size, dispersed, and unsecured,” and there is a high degree of uncertainty regarding future cash recovery. Accurately valuing them is extremely difficult.

Second is the disposal challenge. After acquiring the assets, transferees mainly rely on their own resources or third parties to conduct collections; their ultimate returns depend heavily on the compliance, professionalism, and technical capabilities of the collection team. Against the backdrop of increasingly strict regulation regarding consumer rights protection, compliance disposal costs continue to rise.

Third is the capital challenge. This mainly applies to transferors, especially small and medium-sized banks. As noted by 每经记者, the National Financial Regulatory Administration data show that as of the end of the fourth quarter of 2025, the capital adequacy ratios of city commercial banks and rural commercial banks were 12.39% and 13.18%, respectively—both below the industry average. Meanwhile, their non-performing loan ratios were as high as 1.82% and 2.72%, respectively, significantly above the industry average. For them, disposing of non-performing assets is “stopping the bleeding,” while replenishing capital is “transfusing blood.” Both must move forward in tandem, otherwise it will be difficult to escape the vicious cycle of “risk accumulation—capital erosion.”

“The healthy development of the market cannot be achieved without technological support. Using technologies such as big data and artificial intelligence to precisely classify, value, and risk-price massive receivables is the key to solving information asymmetry and improving transaction efficiency.” The aforementioned professional believes.

He also said that an improved ecosystem is equally important. More professional and compliant asset management service providers (AMCs) and debt-collection institutions need to be cultivated to form a multi-layered, specialized disposal ecosystem, so that asset types at different categories and levels can all find appropriate disposal outlets. Only in this way can the market for transferring individual-loan non-performing assets both ensure effective risk clearing and uphold the bottom line of protecting the legitimate rights and interests of financial consumers.

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