Research On The Securitization Effect Of China Merchants Bank's Credit Card Non-Performing Asset

In 2006,NPA Securitization was started formally in China,which however was suspension in 2008 due to the global financial crisis.In 2016,due to the growing amount of NPAs and the Ineffectiveness of NPA treatments,the CBRC has started the NPA securitization activity.By disposing of NPAs,commercial banks can make the most efficient use of their NPAs,thus strengthening the safety,profits and the liquidity of banks,and thus ensuring their operation.China Merchants Bank,one of the first group of pilot banks,introduced the credit NPLs into the assets ponds for the primary period in 2016,which has given birth to one of the first credit card NPL ABS products in China and the first credit card NPLs globally,so the tracking study on the securitization effect of this product has some relevance and significance for the commercial banks in China in the disposing of credit card NPLs.This article first sorted out and concluded the related literatures from several aspects of the motive of asset securitization,the influences of NPA securitization,and credit card ABS,On this basis,China Merchants Bank He Cui 2016-1 was used as the cut-off point to undertake an event study approach to undertake an experimental of short-term shareholder wealth effect after the issue of the bank’s credit card NPA ABS.and to analyze the financial effects generated by the securitization,using all of the bank’s Hezui series non-performing asset-backed securities.The experimental results demonstrated that the public listing of the product did not have a remarkable effect on the market value of China Merchants Bank in the short term,which means that it did not have a remarkable effect on the company’s stock price,and the market could not reflect the information received on the changes of the stock price,but it could produce a positive short-term shareholder wealth effect;for the financial effect,the non-performing loan ratio of China Merchants Bank decreased and the capital adequacy ratio increased after the implementing of the securitization,which brought a reasonable source of revenue to China Merchants Bank,and although the liquidity ratio decreased and the deposit to loan ratio increased,the overall result was positive.Finally,we suggest strict screening of the pooled assets,comprehensive use of internal and external credit enhancement methods,increasing the construction of the subordinated securities market and introducing foreign investors,and strengthening information disclosure of the securitized products in light of the insights brought by the case.The Marginal contributed of this paper is to take a typical product as the entry point to the empirical analysis of the long-term and short-term effects of securitization of credit card non-performing assets of a commercial bank,and the findings of the study have some reference value for the product pricing and performance evaluation of similar commercial banks to carry out related business.