A Chinese auction of US$3 billion in non-performing loans found buyers for only three of the 22 NPL packages available. One of the asset management companies established to manage the RMB 1.4 trillion in NPLs transferred from China's four largest banks declared the auction a success despite the fact that the auction did not achieve its goals.
Foreign analysts commented that the relative failure of the auction was a positive development in that it forced Chinese asset management companies offering the NPLs to reconsider the way in which they were offering NPLs. Many bankers complained that they were offered little information regarding the challenge of recovering value from the loans.
Two of the NPL packages that were sold were reportedly purchased by US investment banks between 10 and 15 percent of their original value.