SHANGHAISINGAPORE, Dec 18 Reuters Chinese banks are putting bad loans up for sale at a record pace, as regulators push for faster disposal of sour debts amid rising consumer defaults during an ailing postCOVID economic recovery.

Issuance this year of securities backed by nonperforming loans NPLs is set to jump about 40 from a year ago to a record, data from a ratings agency showed, as lenders rush to offload distressed assets linked to mortgage, credit card and consumer borrowings.

This week alone, six banks including China Everbright Bank and Bank of Jiangsu plan to issue 1.5 billion yuan 210.49 million worth of assetbacked securities ABS based on bad loans, according to sales prospectuses reviewed by Reuters.

Typical buyers include fund managers, wealth management firms, specialist distressed debt investors and some hedge funds.

Securitisation has become a regular tool for Chinese banks to dispose of bad loans. It39;s efficient, flexible, and regulators are giving relatively faster approvals for such products, said Kan Zhou, head of structured finance ratings at SP Global China Ratings.

Issuance is climbing also because in an economic downturn, there39;s growing supply of nonperforming assets, he said, expecting the market to grow further next year.

Chinese authorities have blacklisted 8.57 million people who missed payments on everything from home mortgages to business loans, according to court data. The cumulative figure is up 50 from the 5.7 million…