Henan's largest AMC has acquired non-performing assets from three local rural commercial banks.

On November 18, Zhongyuan Asset Management Co., Ltd. (referred to as "Zhongyuan Asset") announced that it had signed "Non-Performing Asset Transfer Agreements" with Luoyang Rural Commercial Bank, Junxian Rural Commercial Bank, and Hebi Rural Commercial Bank. The three banks transferred non-performing assets to Zhongyuan Asset for RMB 2.21 billion, RMB 1.564 billion, and RMB 1.503 billion, respectively, with the contracts already in effect.

In total, Zhongyuan Asset spent approximately RMB 5.277 billion on this acquisition. The company stated that the transaction would help optimize the regional financial ecosystem in Henan and positively impact its operations, financial condition, and debt repayment capabilities.

Established in August 2015, Zhongyuan Asset is a provincial-level local asset management company licensed for bulk acquisitions of non-performing financial assets and is affiliated with the Henan Provincial Government.

This year, Henan's local AMCs have been actively assisting rural commercial banks in shedding bad assets. In August, Zhongyuan Asset acquired non-performing assets from Pingdingshan Yingcheng Rural Commercial Bank for RMB 1.947 billion. Notably, shortly after this transaction, Yingcheng Rural Commercial Bank was included in the second batch of mergers and acquisitions by Henan Rural Commercial Bank, the largest local bank in Henan.

Industry experts suggest that local AMCs are accelerating the cleanup of non-performing assets among rural financial institutions, potentially speeding up the reform of Henan Rural Commercial Bank.

"Zhongyuan Asset, with its multi-billion-yuan acquisition capacity and provincial financial backing, strengthens the 'buffer' function for regional financial risks," said Zheng Shuangjie, a lawyer at Longan (Guangzhou) Law Firm and member of the Guangzhou Lawyers Association's Execution and Asset Disposal Committee. He noted that this not only improves asset-liability quality but also establishes replicable standardized processes for due diligence, valuation, and announcements, shortening the asset disposal cycle and enhancing overall reform efficiency.

**Henan Local AMCs Repeatedly Acquire Bad Assets from Regional Banks**

Among the sellers in this transaction, public information shows that Luoyang Rural Commercial Bank was the first prefecture-level rural commercial bank in Henan, established in July 2016, with Henan Investment Group as its controlling shareholder (90.39% stake). The other two banks are based in Hebi City: Hebi Rural Commercial Bank, founded in 2014 through the merger of two rural credit cooperatives, is majority-owned by Henan Ruibeca Holding Group, while Junxian Rural Commercial Bank, established in 2017, was restructured from the former Junxian Rural Credit Cooperative, with Henan Investment Group as its largest shareholder.

Resolving non-performing assets has been a key focus for these banks in recent years. In 2019, Junxian Rural Commercial Bank was flagged by the National Audit Office, which reported that 42 commercial banks in Henan, including Junxian, had non-performing loan ratios exceeding 5%, with 12 surpassing 20%. Luoyang and Hebi Rural Commercial Banks have also emphasized "clearing bad assets and reforming risks" in their work reports.

This is not Zhongyuan Asset's first intervention this year. In August, it acquired non-performing assets from Pingdingshan Yingcheng Rural Commercial Bank for RMB 1.947 billion. Similarly, in July, Henan Asset Management Co., another major AMC in Henan, signed agreements to purchase bad assets from Taikang Rural Commercial Bank and Xinye Rural Commercial Bank for RMB 1.666 billion and RMB 1.456 billion, respectively.

As Henan's first licensed local asset management company, Zhongyuan Asset is controlled by Henan Investment Group, with the provincial finance department as its ultimate owner. According to its Q3 financial report, Zhongyuan Asset's total assets reached RMB 85.978 billion by the end of September 2025, with operating revenue at RMB 1.251 billion (down 44.67% YoY) and net profit at RMB 88 million (down 19.3% YoY).

**Over 100 Bank Institutions Integrated Since Establishment**

The frequent large-scale acquisitions of non-performing assets by Henan's local AMCs this year reflect their mission-driven role. Notably, shortly after these transactions, Pingdingshan Yingcheng, Taikang, and Xinye Rural Commercial Banks were included in the second batch of mergers under Henan Rural Commercial Bank.

Henan Rural Commercial Bank officially launched in Zhengzhou on February 26, 2025, initially merging 25 institutions, including rural commercial banks and credit cooperatives from Zhengzhou, Xinxiang, Puyang, and Jiyuan, as well as Yingyang Lifeng Village Bank. By September, the reform advanced further with the absorption of 82 institutions from nine cities, including Kaifeng and Pingdingshan.

Post-merger, Henan Rural Commercial Bank boasts a vast network and formidable strength. As of October 2025, it operates 4,285 branches with 45,400 employees, holding total assets of RMB 2.74 trillion, deposits of RMB 2.32 trillion (20% of the provincial total), and loans of RMB 1.27 trillion (14% of the provincial total).

The reform follows a phased, batch-by-batch strategy to ensure financial stability and service continuity. Dong Ximiao, Chief Researcher at Zhaolian, noted that this gradual approach aims to establish a unified provincial-level rural commercial bank.

Data from the National Financial Regulatory Administration shows Henan's banking sector had a non-performing loan ratio of 1.34% by the end of 2024, with past cases of improper bad asset disposals in the rural credit system.

"Local AMCs' market-based absorption of bad assets aligns with the dual-track reform of 'risk resolution + integration' in rural credit cooperatives," Zheng Shuangjie emphasized. He suggested that future AMC involvement should focus on core operations, adopt "non-performing + investment banking" models, leverage digital transformation for efficiency, and innovate financing and disposal methods to balance risk mitigation and sustainability.