The Analysis Of State-owned Commercial Banks By The New Old Behavior

"Borrowing new loans to repay the old" means that when a company can't repay the matured loans , banks issue new loans to the company to make it repay the principal and /or interest of the old loans . " collecting interest by issuing new loans " is its special form. It means when a company can't even repay interest besides the principal, banks issue new loans to make it repay the old principal and interest. Because the new loans formed by this way were put into companies which operate so badly that even interest can't be repaid , this kind of credit behavior will affect the efficiency of fund , and cause false increase in bank profit . Loans formed through "collecting interest by issuing new loans " are also called " evergreen loans "."Borrowing new loans to repay the old" is a common credit behavior of Chinese commercial banks . This text studies the loan data and loan cases of one of the branches of one of the state-owned banks to examine the causes of this credit behavior and its effect on bank's operation and administration . At the same time ,this text compared another bad-loan collecting method----suing with "borrowing new loans to repay the old" method , and made some suggestions on strengthening administration and decreasing "borrowing new loans to repay the old" behavior .First this text generalizes the existence of "evergreen loans" in Japanese banks and their causes, their negative effects and domestic knowledge about "borrowing new loans to repay the old" behavior. Second ,this text analyzes the policies of arranging "borrowing new loans to repay the old" loans of one of the state-owned banks, and statistically studies the loan structure and loan quality at the end of year 2004 of one of the branches of one of the state-owned banks. Third ,this text analyzes another commonly used bad-loan collecting method ----suing , and considers that suing sometimes can't bring the greatest benefit for banks. Fourth, through case studies, this text points out the causes , advantages and disadvantages of "borrowing new loans to repay the old" behavior, and considers that different methods should be used at different conditions. Last ,this text makes some suggestions on regulating "borrowing new loans to repay the old" behavior.