It represented a recovery ratio of 46.22 percent, a bank spokesman said. But it failed to attract buyers for the remainder - 6.07 billion yuan (US$731.3 million) worth of assets.

The assets, including cars, real estate and land use rights, were seized from borrowers as the bank aimed to tackle its non-performing loans (NPLs), the spokesman said.

Yang Xiaoyang, head of the bank's Asset Preservation Department, said it wants to try and dispose of up to 55 billion yuan (US$6.6 billion) in bad assets this year.

"We want to reduce non-performing loans by 4 percentage points this year," he said.

The CCB, which handed 250 billion yuan (US$30.1 billion) worth of non-performing assets over to the China Cinda Asset Management Corp in 1999, still had 267.8 billion yuan (US$32.3 billion) worth of non-performing assets at the end of last year.

At present, the bank's NPLs - by the international standard of five category classification - stands at 15.36 percent, Yang said.

"We have to speed up the disposal of non-performing assets because we want to become the first State-owned commercial bank to be listed on the domestic stock exchanges," he said.

Bank President Zhang Enzhao said the bank is aiming to drop its NPL ratio to less than 10 percent within two years.

To achieve the goal, it has to explore new ways to handle bad assets, Yang said.

The spokesman said the bank will form a joint venture with US investment bank Morgan Stanley to resolve bad assets with a book value of about 4 billion yuan (US$482 million).

The deal, which insiders said will be sealed next week, could help the bank move faster in the disposal of non-performing loans, said Huang Jinlao, a senior researcher with the International Financial Research Institute.

He said Chinese commercial banks will have to lower their NPL rates, get rid of historical financial burdens and raise their capital adequacy to international standards as more foreign financial institutions are entering the local market.

(China Daily July 4, 2003)