China bad debt managers see earnings tank on deepening property losses

China's distressed-debt managers have been in turmoil as aggressive lending to embattled developers and unchecked expansion into other areas has beset the $730 billion funds with heavy credit losses

China Huarong Asset Management Co. and China Cinda Asset Management Co., the nation’s two largest state-owned distressed debt funds, reported a slump in first-half earnings as credit impairments surged on a deepening property crisis. 
 

Net income for the first six months at Cinda dropped 33% to 4.51 billion yuan ($652 million), after impairment losses on assets jumped 85%, according to an exchange filing. Huarong on Monday posted a net loss of 18.87 billion yuan for the same period, compared with a profit of 158.3 million yuan a year ago, as impairment charges more than tripled.

China’s distressed-debt managers have been