Recently, a local asset management company (AMC) in Henan Province acquired non-performing assets from three rural commercial banks, with a total transaction value exceeding 5.2 billion yuan.

Since 2024, regulatory policies have actively encouraged AMCs to participate in risk mitigation efforts, particularly for small and medium-sized financial institutions. Local AMCs have gained increasing importance, with significant business opportunities emerging. According to the National Financial Regulatory Administration, China's banking sector disposed of over 3 trillion yuan in non-performing assets in 2024.

As of Q3 2025, the non-performing loan balance of commercial banks in China stood at 3.52 trillion yuan, an increase of 243.29 billion yuan from the beginning of the year. The non-performing loan ratio rose slightly to 1.52%, up by 0.02 percentage points.

**Henan AMCs Actively Engage in Risk Resolution** Zhongyuan Asset Management Co., Ltd. (Zhongyuan AMC) recently announced that it signed non-performing asset transfer agreements with Luoyang Rural Commercial Bank, Xunxian Rural Commercial Bank, and Hebi Rural Commercial Bank on November 13, 2025. The transaction values were 2.21 billion yuan, 1.56 billion yuan, and 1.503 billion yuan, respectively. The agreements have already taken effect.

Zhongyuan AMC stated that these transactions will help optimize the regional financial ecosystem in Henan and positively impact the company's operations, financial condition, and debt repayment capacity.

Earlier this year, Zhongyuan AMC also acquired non-performing assets worth 1.947 billion yuan from Pingdingshan Yingcheng Rural Commercial Bank in August and purchased 1.72 billion yuan in credit assets from Zhongyuan Trust in June. In September 2024, the company reached a 10-billion-yuan deal with Zhengzhou Bank, involving a mix of cash and trust beneficiary rights.

Zhongyuan AMC, a provincial-level AMC licensed for bulk acquisitions of non-performing financial assets, is backed by the Henan Provincial Government with a registered capital of 13 billion yuan. By the end of 2024, its total assets reached 70.87 billion yuan, with annual investments totaling 18.2 billion yuan.

Another local AMC in Henan, Henan Asset Management Co., Ltd., has also been active in resolving risks for small and medium-sized financial institutions. In July 2025, it acquired non-performing assets worth 1.666 billion yuan and 1.456 billion yuan from Taikang Rural Commercial Bank and Xinye Rural Commercial Bank, respectively, through public bidding.

**Discount Rates and Industry Trends** Typically, AMCs acquire non-performing assets at discounted rates, with banks primarily transferring non-performing loans. According to industry data, the average discount rate for bulk retail non-performing loans in 2024 was below 10%, while single corporate loans averaged below 45%, and bulk corporate loans below 25%.

**Record High in Non-Performing Asset Disposal** Regulators have increasingly directed AMCs to participate in risk mitigation, reinforcing their role in regional financial stability. Analysts note that banks face capital and liquidity constraints when handling non-performing assets internally, making AMCs essential for efficient disposal.

In 2024, China's financial institutions disposed of a record 3.8 trillion yuan in non-performing assets, maintaining systemic risk prevention. The banking sector has consistently managed around 3 trillion yuan in non-performing assets annually since 2020, keeping the overall non-performing ratio stable.

**Funding Challenges and Industry Outlook** The AMC industry is capital-intensive, requiring substantial funding for acquisitions and lengthy recovery cycles. Factors such as capital strength, financing capabilities, and shareholder support significantly influence AMCs' sustainability.

Bond markets have become a key funding source for local AMCs, with lower interest rates in 2024 reducing financing costs. While state-backed capital injections enhance risk resolution efficiency, some smaller AMCs still face operational pressures due to rising debt and weaker profitability.