With China's slowing economy, Beijing has adjusted its monetary policy by reducing the reserve requirements for Chinese banks twice since late last year to encourage lending. Whilst this may help improve liquidity, more loans nearly always creates more opportunities for bad loans. China's non-performing loan (NPL) levels have not significantly increased yet, but with predictions suggesting that these level are set to increase, it is essential that Chinese banks attempt to optimize recoveries from NPLs.
In this issue of Spectrum, we discuss the glaring differences between how NPLs are handled in Chinese banks and western banks, and how western banks are often able to recover more than their Chinese counterparts.
We also share with you our knowledge and experience in helping to resolve Chinese NPLs.