Personal loans become the main focus of disposal; banks intensively transfer non-performing assets

On March 3rd, Beijing Business Daily reporters found that after the Spring Festival holiday, many institutions including state-owned major banks, joint-stock banks, and city commercial banks have been actively listing non-performing asset packages on the Silver Registration Center. The main targets are personal non-performing loans, including consumer loans and credit card overdrafts, aligning with the industry trend of gradually revealing risks amid the expansion of retail lending in recent years.

Regarding the listed asset packages, they generally show poor asset quality, with significant long-term overdue characteristics, mostly unsecured credit loans. Additionally, most assets are in a non-litigation state, highlighting banks’ urgent need to accelerate disposal and avoid risk accumulation.

Intensive Listing of Non-Performing Asset Packages

Banks are clearing their non-performing assets in a concentrated manner. On March 3rd, Beijing Business Daily noted that China Bank’s Jiangxi Branch, Qingdao Branch, Dalian Branch, Liaoning Branch, and Shanxi Branch have all actively listed non-performing asset packages, mainly consisting of individual bad loans.

Specifically, China Bank Jiangxi Branch announced the transfer of a personal bad loan (consumer loan) project for the first quarter of 2026, involving a total outstanding principal and interest of 111 million yuan across 1,545 assets, with 714 borrowers. The weighted average overdue days are 738.35 days, and the average borrower age is 43.43 years. According to the five-level classification, there are 912 substandard loans, 344 loss loans, and 289 doubtful loans, all unsecured credit loans. In terms of litigation status, 1,023 assets are non-litigation, accounting for over 60%, while 522 assets are in litigation, settled, or under mediation.

China Bank Qingdao Branch also released its first batch of personal bad loans (consumer loans) for 2026. This batch involves 593 assets for 267 borrowers, with a total outstanding principal and interest of 37.37 million yuan. The asset quality includes 288 substandard loans, 182 loss loans, and 123 doubtful loans, with an average overdue of 463.02 days. All are unsecured credit loans, with over 80% in non-litigation status.

Besides major state-owned banks, joint-stock banks and city commercial banks are also actively listing personal non-performing assets on the Silver Registration Center.

Ping An Bank has launched its first batch of personal bad loans (credit card overdrafts) for 2026. This batch involves 11,651 assets for 11,651 borrowers, with an outstanding principal of about 131 million yuan, interest of approximately 16.5 million yuan, and total principal and interest of about 148 million yuan, plus other fees of around 572,750 yuan. The weighted average overdue days are 1,104.65 days, all classified as loss, and all are unsecured credit loans. Only one asset is in final enforcement, while the rest are not in litigation.

Jiangsu Bank announced its first and second batches of personal bad loans (consumer loans) for 2026. The first batch involves 34,000 borrowers and 122,000 loans, with a total outstanding principal and interest of 1.258 billion yuan, all from online personal loans, with an average overdue of over 310 days, most not yet in litigation. The second batch involves about 1.104 billion yuan in outstanding principal and interest, with 14,361 assets and 10,891 borrowers, all unsecured credit loans. Over 97% of these assets are non-litigation.

Regarding the concentrated listing of bad asset packages by banks, Gao Zhengyang, a special researcher at Shangshang Bank, pointed out that in recent years, retail banking has expanded rapidly, and under the industry’s customer segmentation strategy, the risk resistance of long-tail customers is relatively weak. Meanwhile, the online process of consumer credit continues to accelerate, with an increasing proportion of credit-type loans, which lack effective risk mitigation due to their unsecured nature. Overall, retail assets tend to be small, numerous, and dispersed, making bad debts more prone to point outbreaks and surface-wide spread.

Pricing and Collection Challenges Persist

From the multiple asset packages listed by various banks, the targets are relatively concentrated, mainly personal loans. This characteristic aligns with the overall industry trend: as retail lending expands, risks associated with consumer loans and credit card overdrafts are gradually surfacing, becoming key areas for bank asset disposal.

Furthermore, the assets generally show poor quality and long overdue periods. The packages listed all feature long overdue times, with high proportions of loss assets, indicating significant difficulty in recovery and full risk exposure. Most assets are still in non-litigation status, not yet entering judicial recovery, reflecting banks’ efforts to accelerate disposal by transferring assets in batches early after overdue, to avoid long-term holding costs and risk accumulation.

An industry insider noted that the guarantee methods are mostly single and unsecured, which increases uncertainty in asset recovery. Without collateral, banks face difficulties in recouping losses if borrowers encounter repayment problems.

Gao Zhengyang believes that valuation and pricing of such asset packages face difficulties. Since personal loan bad debts involve numerous small claims spread across many debtors, traditional valuation methods based on individual due diligence are less applicable. The lack of collateral or pledge as a valuation anchor increases future cash flow recovery uncertainty, making precise pricing models challenging. Additionally, transfer transactions face obstacles. Massive data leads to significant information asymmetry, making it difficult for transferees to conduct thorough due diligence quickly, raising the bar for their pricing capabilities.

Recovery and disposal also face significant challenges. Gao emphasizes that on one hand, it is difficult to accurately assess debtors’ willingness to repay, and traditional collection methods involving large-scale manpower are costly. On the other hand, most assets are not yet in litigation, and judicial resources for recovery are limited, prolonging recovery cycles and lowering actual recovery rates. In the field of personal loan bad debts, technological empowerment—such as AI and big data profiling—can be actively used to achieve precise asset segmentation and differentiated disposal. Additionally, deeper cooperation between banks and asset management companies (AMCs) is expected to help build a new digital and intelligent model for personal loan bad debt disposal.

Beijing Business Daily Reporter: Song Yitong

(Edited by: Qian Xiaorui)