KPMG’s Special Situation Forum: China 2017

KPMG and China Money recently held a seminar in Hong Kong entitled “Special Situations Forum: China 2017”

Guest speakers were from Bain Capital Credit, UBS and Poseidon Capital to name but a few.

 

Paul Errington, the CEO of Connaught Finance attended the Forum and had this to say: The groups focus was on the Non-Performing Loans (NPL’s) market in China, how banks were trying to dispose of these to other companies and how to restructure these.

KPMG alone, helped dispose of CNY 342 billion across 567 NPL portfolios.

But one of the major questions is who is buying these portfolios and basically this is other funders / banks within China, so as far as “disposal” is concerned it is not strictly correct as they are being moved within the domestic banking market. This situation will continue as long as foreign investors have government restrictions imposed on them coming into China.

 

Another point of discussion was the official level reported of NPL’s. Many portfolios have been addressed by wrapping around them financial structures that allow them to be accounted for as “investments” and not NPL’s hence it is difficult to tell the actual percentage of NPL’s in China.

 

Nearly 90% of all NPL’s are property based and taking control of these can often prove legally difficult but over the last 10 years the government have made massive changes and inroads to assist the legal structure within the courts and without a doubt this has helped the market.