(Yicai) Nov. 14 -- China’s banks are stepping up efforts to offload non-performing assets, including bad loans, seized real estate and high-value goods, by listing them for sale on online trading platforms as the end of the year is quickly approaching.

Twenty banks have listed 92 NPAs for sale with the Banking Credit Asset Registration and Transfer Center this month, with the outstanding principal and interest amounting to more than CNY3 billion (USD422.7 million), according to incomplete statistics. 

Industrial and Commercial Bank of China, Postal Savings Bank of China, Ping An Bank, China Construction Bank, and other big lenders have listed NPAs worth hundreds of millions or even billions of Chinese yuan, equivalent to tens of millions and hundreds of millions of US dollars, with the transfer center as well as on local asset and online trading platforms, Yicai found.

More lenders will begin selling NPAs as the year draws to a close, said Xue Hongyan, a special researcher at Jiangsu Merchants Bank. As the fourth quarter coincides with the regulatory assessment period, it has always been a busy time for banks to offload dud assets, with smaller lenders in particular under greater pressure on asset quality and profitability, Xue pointed out.

Bank of Nanjing has a bad personal loans parcel worth over CNY800 million (USD112.7 million) listed for sale with the transfer center, while Ping An Bank has listed nine NPA parcels, with outstanding principal and interest of more than CNY1.3 billion.

“By transferring NPAs, banks can not only clear out assets that have long tied up capital, are poorly liquid, and have dragged on their performance, but also improve their asset quality and free up capital for future business expansion," said Liao Hekai, an analyst at Jinle Function. 

Commercial banks have disposed of trillions of yuan in bad assets in recent years. They still had a collective CNY3.43 trillion (USD483.3 billion) as of the end of June, while their NPL ratio was 1.49 percent, according to regulatory data.

Lenders are increasingly using different means to dispose of NPAs, shifting from bulk sales toward listing them on market-based trading platforms. Since July, they have also begun directly selling homes and other high-value goods taken as collateral on online auction sites.

Selling collateralized real estate allows the banks to reach a broad pool of individual buyers, which helps shorten the asset recovery cycle and lowers transaction risks, according to Wu Zewei, a special researcher at Jiangsu Merchants Bank.

The properties that banks sell directly offer clearer ownership rights than those sold through judicial auctions, helping buyers avoid potential disputes, and these homes also tend to be priced below comparable listings nearby, said Wang Yuchen, founder of Beijing Jinsu Law Firm.

Beyond real estate, some banks are also offloading other high-value collateral through trading platforms. The Ningcheng branch of Inner Mongolia Rural Commercial Bank, for instance, is selling baijiu, a high-priced Chinese spirit, while another branch is selling off art collections.

Editors: Tang Shihua, Martin Kadiev