At the Global Debt Business Summit, China NPL market will be a major focus, bringing together global investors and AMCs to discuss strategies, new developments and opportunities. The block will cover various means of NPL disposal including whole loan sales, key Issues to look out for, in-house and third party servicing, the potential role of securitisation and much more.
As the first foreign participant in China’s non-performing loan (NPL) market over 20 years ago, DAC has invested in, managed, and serviced over 50,000 credits across a majority of Chinese provinces. Spanning dozens of portfolios and more than 1,500 litigations, DAC leverages its on-the-ground experience to provide comprehensive credit management services, from sourcing and underwriting to collections and profit repatriation.
Our team has recently observed fundamental changes in China’s distressed debt market, which have been further impacted by the Covid-19 pandemic. Although there are nearly 60 national and regional asset management companies (AMCs), various pilot exchange programs, and multiple e-commerce avenues established to resolve bad debts, China’s financial institutions are overwhelmed and facing increasing government pressure to clean up their books.
In October, China’s banking regulator announced its approval for more than USD 250 billion of NPL disposals in the fourth quarter of 2020 alone. Entering next year, we expect further regulatory guidance to encourage foreign investment as China seeks external capital and expertise. DAC anticipates this next wave of supply to lead to downward pressure on pricing, while domestic demand is also likely to decrease due to difficulties securing financing for acquisitions. This combination should lead to a compelling entry point for foreign firms eyeing the market. With our active sourcing team in China, DAC maintains and updates a steady pipeline of opportunities from our deep connections fostered by two decades of leadership in China’s credit markets.
