Two non-performing loan (NPL) securitisations totalling CN¥534 million have just been completed in China. These should be the first of many as part of a CN¥50 billion program. The idea of NPL securitisations has been rubbished by some, but based on the results of the first two sales the process has merit in helping clean up the bad loans made by Chinese banks. Whilst the sample size is small, there’s three key lessons that can be drawn from the process so far.