The Study On The Models Of Treatment Of Non-performing Assets Of State-owned Banks

After National financial meeting, the State Council made it clear that by2005, China’s state-owned commercial banks non-performing assets to total assets ratio should decrease to less than15%. The share of bad loans of state-owned commercial banks has long been high, the reasons include existing political system and their own out-dated management philosophy. With increasing degree of financialization, the national economy put forward higher requirements of the operating efficiency of the financial institutions, which requires financial institutions to better play its services in the construction of economic and social functions.For this reason, since the end of the last century, China government has paid the high attention to non-performing loans of state-owned commercial banks, Four asset management company were established in1999, specializing in dealing with non-performing loans of state-owned banks. They take the traditional methods such as debt-equity swap and packaged sales, but its effect is not significant.This paper aims to study the mode of disposal of bad loans, on the basis of the analysis of, we strive to innovate the traditional modes and consolidate the theoretical basis of the treatment of non-performing loans, and hope to make some suggestions on the treatment of the non-performing loans of China’s state-owned commercial banks and joint-stock commercial banks. Therefore, the study of the problem not only has theoretical significance, but also no shortage of practice sense. On the one hand, from the theoretical sense, it helps to perfect the mechanisms of the theory of non-performing loans in order to find the source of bad loans theoretically. It helps to supplement the theoretical foundation of China’s non-performing loan processing mode, which can assist us to find the methodological basis of the disposal of non-performing loans theoretically. On the other hand, in practical terms, it helps to enhance the operational efficiency of the state-owned commercial banks, so as to enhance its competitiveness in the market, to grab an invincible position in the fierce competition in the market, to play the central task of economic construction better. This paper describes the modes of disposal of non-performing loans:AMC model, securitization model, debt-equity swap model, packaged sales model and so on. In addition to explaining its operation content, I further analysis of the adaptability of each mode in China. As an old saying goes:" Stones from other hills may serve to polish jade".