Non-Performing Loan Disposition Model Of State-owned Commercial Banks

The finance crisises occurred in 1980s-1990s have proved that weak banking system is greatly harmful to the economy development. However, the stability of banking systems in all countries have been challenged severely because of capital fluxion acceleration, capital amount expansion and assets price fluctuation all over the world coming with economy globalization and finance liberalization. The focus of above problems is the great sum of Non-Performing Loan (NPL), which not only affects stability of banking system, but also weakens support of banking system to economy development. As a result, NPL Disposition has become the most crucial issue of keeping amay from finance risk and promoting economy development. In order to establish a stable and effective banking system, China made its first step to deal with NPL of state-owned commercial banks at the end of last century---establishing four Assets Management Companies (AMC) to deal with NPL of the big-four state-owned banks (ICBC, ABC, BOC and CBC). At the beginning of this century, China made its second step---generating the big-four state-owned banks' IPO plan, establishing Central Huijin Investment Company, which has injected 22.5 billion dollars into BOC and CBC severally to add their capital. However, all the above actions cann't automatically guarantee that NPL problem in Chinese banking system can be solved completely.In this thesis, the author explores the reasons and current situation of NPL in Chinese state-owned commercial Banks, and analyzes the influence of NPL on Chinese banking system and Chinese macro-economy. The author pays special attention to Malaysia experiences on NPL disposition, thus making the suggestions to Chinese state-owned commercial banks on the NPL disposition model and institutions construction.