Chinese bad debt giant Huarong finally released its delayed 2020 results with a record loss of over 100 billion yuan.
China Huarong Asset Management’s long awaited 2020 results were finally released with a record loss of 102.9 billion yuan ($15.9 billion), according to an exchange filing over the weekend.
This includes 107.8 billion yuan in impairments and 12.5 billion yuan financial asset losses on leverage reaching 1,333 times,
«Harsh Lesson to be Learned»
Huarong finally released its 2020 annual results after a near five-month delay since March and noted that plans for asset sales in the «near future» and a capital boost can ensure operations for the next 12 months.
Separately, Beijing has reportedly decided to prevent a Huarong collapse with the injection of new capital from state-owned investors including Citic Group, China Insurance Investment Co. and China Life Asset Management Co.
«[An asset and risk review last year] had a significant impact on the operating results and is a harsh lesson to be learned in the development history of the company,» said chairman Wang Zhanfeng. «What is gone is gone, but go for what to come. We will learn from the lesson and take it as valuable experience and the desire to move forward.»
1H21 Profit
In contrast, Huarong managed to turn its bottom line around in the first half to a profit of 158 million yuan, although its key capital level was still far below regulatory requirements.
The bad debt manager has $238 billion in total liabilities including more than $20 billion of offshore bonds.
