In recent years, China’s economy has continued to decline, resulting in a general decrease in incomes for both businesses and individuals. This has led to a deterioration in the credit situation for some borrowers, with personal consumer loans facing a higher risk of delinquency. According to data, the total amount of outstanding principal and interest for non-performing loan transfer business exceeded 280 billion yuan in 2024, reaching a historical high. Among them, the scale of non-performing individual loans transacted accounted for nearly 70% of the total transaction amount.
Recently, Ant Group’s Ant Consumer Finance listed the first batch of individual non-performing consumer loan asset package for sale this year at a discount of 0.9 cents on the dollar. This batch of bad debts involves nearly 40,000 consumers, with defaulters trending younger. This marks the third large-scale disposal of non-performing assets by Ant Consumer Finance within a year.
On February 5, 2025, Chongqing Ant Consumer Finance Co., Ltd. listed the first batch of individual non-performing consumer loan asset package of the new year at the Silver Lake Center, with the total outstanding principal and interest amounting to 581 million yuan.
These bad debts involve about 55,400 consumer loans, owed by 39,400 consumers with an average age of around 38. Among them, one person has borrowed up to 248,600 yuan and has not repaid the amount.
Of the 581 million yuan non-performing loans categorized in five levels of asset quality by Ant Consumer Finance, all are classified as “losses.”
To dispose of this batch of individual non-performing consumer loans, Ant Consumer Finance chose to conduct bulk transfers through online open bidding, with a starting price of only 50.2 million yuan, equivalent to a discount of 0.9 cents on the dollar. This has raised market attention to the asset quality and risk management in the consumer finance industry.
This is the third large-scale disposal of non-performing assets by Ant Consumer Finance since 2024. Previously, in September and August 2024, it transferred non-performing loans with outstanding principal and interest of 590 million yuan and 588 million yuan respectively, involving nearly 200,000 borrowers.
As a leading institution in the industry, while Ant Consumer Finance’s asset transfer scale does not top the list (Nanjing Bank Holding’s “Nanjing Bank Faba Consumer Finance” ranks first with 3 billion yuan), its large customer base (serving over 400 million people) and business concentration (handling “Huabei” and “Jiebei” businesses) make its risk exposure highly scrutinized.
The 581 million yuan non-performing loans transferred by Ant Consumer Finance are all classified as “losses.” The average age of borrowers is 38 years old, lower than the average age of 43.23 years old for defaulters of bank personal non-performing loans in 2024, but some loans are overdue for over 1000 days. According to industry surveys, over 60% of consumer loan defaulters default due to reduced income and inability to repay, while another 25% are affected by difficulties in enterprise operations.
Ant Consumer Finance’s three large-scale disposals of non-performing assets within a year highlight a microcosm of the risks in the consumer finance sector amidst China’s significant economic decline.
In 2024, Chinese commercial banks accelerated the disposal of non-performing loans, reaching a historical high in the size of non-performing assets divested through methods like listing transfers. The frequent “shedding of burdens” by Chinese financial institutions reflects the rising delinquency rates in personal consumer loans.
In January of this year, the latest data on non-performing loan transfer business in the fourth quarter of 2024 revealed by the Silver Lake Center website showed a rapid growth in the total size of non-performing loans listed and transacted throughout 2024 compared to 2023.
According to Securities Times calculations, the total outstanding principal and interest of the non-performing loan transfer business in 2024 reached 286.19 billion yuan, an 80.2% year-on-year increase. Overall, the listing and transaction scales of non-performing loans in 2024 hit historical highs since the initiation of bulk transfer pilot operations for non-performing loans in 2016.
From the participating institutions in the non-performing loan transfer business, the sellers are mainly state-owned banks, joint-stock banks, city commercial banks, rural commercial banks, consumer finance companies, financial leasing companies, etc.
Data shows that the transaction size of non-performing loan transfer by consumer finance companies in 2024 totaled 41.44 billion yuan, accounting for 18.35%, ranking first among various non-bank institutions in terms of transaction size.
In 2024, the transfer scale of individual non-performing loans accounted for a high proportion of the total transaction size of non-performing loan assets transferred by various financial institutions. The transaction scale of individual non-performing loans for the whole year of 2024 reached 158.35 billion yuan, a 64% year-on-year increase, accounting for nearly 70% of the total transaction amount of non-performing loans. Analyzing the structure of individual non-performing loan assets, based on the data from the fourth quarter of 2024, personal consumer loans accounted for the highest proportion, at 66%; followed by personal business loans and credit card overdrafts.
It is worth noting that behind the transfer of non-performing loan assets by various financial institutions in China, there is a strong dissatisfaction among users with the debt collection practices.
According to data from the Heimao platform, as of February 2025, there have been over 60,000 complaints related to “Huabei” and “Jiebei,” involving issues such as violent debt collection and harassment of family and friends.
Reportedly, debt collectors frequently contact borrowers’ relatives, colleagues, and even resort to threats and harassment; they call and send insulting messages frequently outside of working hours; and when users apply for repayment extension due to short-term difficulties, they face aggressive rejections.
For example, in January 2025, a user complained that Ant’s Huabei entrusted a third party to contact their friends and family through the contact list, causing them distress and damage to their reputation.
According to public records, Chongqing Ant Consumer Finance Co., Ltd. was officially established in Chongqing on June 4, 2021. The shareholders of the company include Ant Group Co., Ltd. (formerly known as “Ant Financial”), Hangzhou Jintou Digital Technology Group Co., Ltd. (state-owned enterprise), Nanyang Commercial Bank Co., Ltd. (state-owned enterprise), China Huarong Asset Management Co., Ltd. (central enterprise), and other companies.
“Huabei” is a consumer credit product launched by Ant Financial that can be used for consumption on Alipay, similar to the functions of a credit card. “Jiebei” is a loan service launched by Alipay, an Alibaba Group company, where users can apply for varying loan amounts.