Total nonperforming loans increased only slightly from the year earlier, to $3.2 billion.

"The key is the future direction of the nonperforming loans," he said.

Over the years, he evolved into one of rock's few nonperforming celebrities.

The purchase is the largest ever of Chinese nonperforming loans.

Such an increase would make 1990 the second consecutive year in which nonperforming loans increased by more than $1 billion.

"There's always been an industry for acquiring nonperforming debt," he said.

Many experts say that Chinese banks have put the worst of their nonperforming loans behind them.

But some analysts believe the banks' nonperforming assets have finally reached their peak.

Domestic nonperforming loans, those not earning interest, declined by $250 million in the quarter.

As a result, the nonperforming loans owned by the asset management companies are nearly worthless.

Linin Day, the chief executive, said the bank could write off its nonperforming loans over 15 years and survive.

"This indicates they are writing off their nonperforming loans - in a sense this is a good sign," he said.

Lawmakers also want the government to allow the banks to write off their nonperforming loans at a slower pace.

Given current institutional imperfections, this could easily lead to new nonperforming loans."

He added that conservative accounting principles require banks to disclose large nonperforming loans.

The loss reserves of many Southern banks amount to less than 70 percent of their nonperforming loans.

After bank stocks plummeted because of their nonperforming loans in 1990, credit quality began steadily improving.

He said potential buyers in the future would raise the same issues in assessing nonperforming loans.

Banks will assemble their nonperforming real estate loans and sell them to the newly formed corporation.

The long decline in real estate prices and mounting nonperforming loans, however, have left many banks little choice but to exit these projects.

Yet every year, the banks' losses have piled higher and their nonperforming loans have grown larger.

The bank said that its nonperforming assets were at their lowest in three and a half years, an indication of improvement in the economy.

Regulators also want banks to reduce their nonperforming loans to about 4 percent of their total lending by March 2005.

Some analysts even warned that the nonperforming loans could spiral into a financial crisis and derail the nation's economic growth.

The mill was shut down in 2002 and has been identified as a nonperforming asset by Georgia Pacific.