Study On The Evaluation Mode Of Disposition China's Commercial Bank Non-Performing Assets

To meet the needs of reasonably evaluation non-performing assets (NPAs) in commercial banks, NPAs evaluation has been carried out and the key is to construct an evaluation mode. First, the paper defines and/or re-defines NPAs, value of NPAs and NPAs evaluation and points out that NPAs are mismatched assets of banks, among which non-performing loans resulting from broken industry chain, i.e. loans being converted into commodities or other physical assets to play an industrial function in certain industry have not been converted back to money funds to pay off banks, loans are not performing. As of value of NPAs, we need to understand the concept with points of dynamic and static views. On the one hand, NPAs are recognized by banks on the basis of the condition of assets at a point in time, its revenues possibly earned at just the time point decide the value of NPAs. Besides that factors changing with time will have effects on bank assets, especially on NPAs, so NPAs are of quite different value at different points in time. And NPAs are of great future revenues to investors and of certain payments to banks and other specified institutions with aims of disposing NPAs. Generally, reasonably acceptable pricing of NPAs for disposal should been made via means of NPAs evaluation. However, because of disordered behaviors of the operations of disposition and evaluation of NPAs, some problems have been met, i.e., it is unaccepted to use current evaluating techniques to get NPAs valuation and on its basis to make the disposal price of NPAs, or it is unsuitable for NPAs evaluation to use some evaluation approaches of non-financial assets or other properties, or evaluation results are not worth reference and usually valuation is far higher than the real transaction price of disposal. AH in all, the essential cause is lack of a series of evaluation approaches specially used for NPAs.For this, the paper repositions the evaluation and valuation in disposition of NPAs and makes a research and analysis of the current study on the topic at home and abroad.The paper comes to conclusion that seeking a fair value of NPAs and giving just reference for making the disposal price and the evaluation of NPAs with the preconditions of a series of right evaluation approaches is the core role played by evaluation in NPAs disposal. Furthermore, the paper lays a solid theoretical foundation by analyzing the theory of value and types of evaluation value (investment value, value-in-use, liquidation value, and so on) .On the basis of all above research, the paper puts forward a series of evaluation approaches specially for NPAs evaluating at home in the end of the paper and gives a further case analysis to test the practical application and limitation of the approaches in operation of this mode.