A Study On Value Evaluation Of Non-performing Assets In Commercial Banks Based On The Improved Hypothetical Liquidation Method

Since the reform and opening up,China’s economic development has made remarkable achievements.From 2000 to 2018,China’s overall economic growth rate has always maintained at more than 6.5%.However,with the rapid economic growth,micro enterprises have accumulated large amount of debt risk.Under the condition of constantly high corporate leverage,the risk of financial industry is increasing,and the non-performing assets of commercial banks have entered a new round of rising channel.Statistic data shows that,from 2015 to 2019,the overall scale of non-performing loans of China’s commercial banks continues to rise,from 1.27 trillion yuan at the end of 2015 to 2.41 trillion yuan in 2019,with an average annual growth rate of more than 22%.Therefore,this paper believes that the value evaluation of non-performing loans of commercial banks is imminent.The main research content of this paper is divided into two parts: firstly,considering the influence of the debtor’s repay willingness coefficient on the recovery and recovery rate of non-performing assets of commercial banks,combining with the analytic hierarchy process(AHP)to measure the debtor’s repay willingness coefficient,and then optimize the hypothetical liquidation method of non-performing loan evaluation of commercial banks.The results show that: the influencing factors of the debtor’s repay willingness coefficient mainly include five aspects: legal environment,market environment,business status,the completeness of loan procedures,and the debtor’s credit awareness.The calculation results of AHP also show that among the 10 specific evaluation indexes selected in this paper,the cash flow ratio of the debtor’s sales revenue in recent three years,the year-on-year growth rate of the debtor’s quarterly sales revenue in recent three years and the completeness of the debtor’s loan data are the most influential indexes.Secondly,this paper chooses a loan from the Rural Commercial Bank of China-Z company loan as a case,and uses the optimized hypothetical liquidation method to evaluate the loan.The results show that: after considering the debtor’s repay willingness coefficient,the total repayment ratio of the loan decreases by 2.47%,further excluding 71.43% of the loan amount with collateral,only considering the influence of the debtor’s repay willingness coefficient on the value of general credit loans,the degree of its influence on the repayment ratio of credit loans is 25.81%,which is far higher than that of the total non-performing loans.It shows that the optimization model of hypothetical liquidation method proposed in this paper has strong practicability for the valuation of non-performing assets of commercial banks with a large number of general credit loans.This paper takes the value evaluation of non-performing assets of commercial banks as the research object.On the basis of the existing hypothetical liquidation method,considering the impact of debtor’s repay willingness coefficient on the recovery rate of non-performing loans of commercial banks to improve the hypothetical liquidation method,and it is helpful to improve the value evaluation method of non-performing loans.At the same time,the value management of non-performing loans is important mean to improve the operational efficiency of commercial banks.This study also has important reference significance for commercial banks to improve their own non-performing loan management efficiency.