China to agree to 50b yuan of bad loan securitisation: sources

Shanghai

CHINA will allow domestic banks to issue up to 50 billion yuan (S$10.7 billion) of asset-backed securities based on their non-performing loans (NPLs), the first quota for such sales since 2008, people familiar with the matter said.

The quota, which will initially be allocated mainly to China's largest banks, will allow lenders to remove NPLs from their balance sheets at a time when asset quality is deteriorating and the economy is slowing, the people said, asking not to be named as the plan isn't public.