China banks step up sales of bad loans as consumer defaults rise

Chinese banks are putting bad loans up for sale at a record pace, as regulators push for faster disposal of sour debts amid rising consumer defaults during an ailing post-COVID economic recovery. Issuance this year of securities backed by non-performing loans (NPLs) is set to jump about 40% from a year ago to a record, data from a ratings agency showed, as lenders rush to offload distressed assets linked to mortgage, credit card and consumer borrowings. This week alone, six banks including China Everbright Bank and Bank of Jiangsu plan to issue 1.5 billion yuan ($210.49 million) worth of asset-backed securities (ABS) based on bad loans, according to sales prospectuses reviewed by Reuters.