--- title: "Bank Of Xi'An wins first-instance lawsuit over 730 million yuan non-performing loan case" type: "News" locale: "en" url: "https://longbridge.com/en/news/271499454.md" description: "Bank of Xi'An's Xianyang Branch won the first instance lawsuit, requiring Xingping Hongyuan Development Construction Co., Ltd. to repay the principal and interest of 730 million yuan in loans. The judgment confirmed the termination of the loan contract, and Hongyuan Company must repay within 15 days, with Qidi Environment bearing joint liability. The court supported Bank of Xi'An's main claims and set a repayment schedule. Although Bank of Xi'An has made provisions for impairment, it is expected not to have a significant impact on profits, but Qidi Environment's financial condition may affect debt recovery" datetime: "2026-01-05T10:45:52.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/271499454.md) - [en](https://longbridge.com/en/news/271499454.md) - [zh-HK](https://longbridge.com/zh-HK/news/271499454.md) --- # Bank Of Xi'An wins first-instance lawsuit over 730 million yuan non-performing loan case The Xi'an Bank Xianyang Branch's debt collection lawsuit, which lasted for several months, has finally yielded a preliminary result. The Xi'an Bank Xianyang Branch won the first-instance judgment in a financial loan contract dispute involving a principal and interest of 730 million yuan. The loan contract has been terminated, and Hongyuan Company must repay the amount within 15 days after the judgment takes effect, with Qidi Environment bearing joint liability. The bank has priority rights to the project's income rights. This loan has been classified as a non-performing loan and corresponding impairment provisions have been made, and it is expected that it will not have a significant impact on the company's current or future profits. ## **First-instance Judgment Delivered** The first-instance judgment made by the Intermediate People's Court of Xianyang City, Shaanxi Province, shows that the defendant, Xingping Hongyuan Development Construction Co., Ltd., must repay the principal of 730 million yuan and corresponding interest within 15 days after the judgment takes effect, while the once-prominent environmental industry star, Qidi Environmental Technology Development Co., Ltd., must bear joint liability for this debt. From the content of the judgment, the court supported the main claims of Xi'an Bank: not only confirming the termination of the loan contract but also clarifying the timeline and calculation method for debt repayment. It is noteworthy that the interest calculation is divided into two phases: from December 21, 2024, to May 8, 2025, it will be calculated according to the original contract, and thereafter it will be calculated based on the LPR (Loan Prime Rate) until the actual repayment date. ## **Can Multiple Safeguards Ensure Debt Recovery?** Several arrangements in the judgment are worth noting. The court granted Xi'an Bank Xianyang Branch priority rights to recover income from the "Xingping City Ecological Wetland Comprehensive Project Supporting Infrastructure PPP Project" within the scope of the aforementioned debt against the defendant Hongyuan Company. PPP projects typically have stable cash flows and government credit backing, and income rights pledges are common risk control measures for infrastructure loans. However, reality is often more complex than judgments. The operating conditions of the relevant companies can also affect debt recovery. Public information shows that Qidi Environment, as a joint guarantor, has been continuously losing money in recent years, facing bond defaults and litigation. The question for investors is to what extent a guarantor that is "facing numerous difficulties" can bear the joint liability of 730 million yuan. ## **Impairment Provisions Made, but Recovery Rate Remains Uncertain** Xi'an Bank emphasized in its announcement that the loan has been classified as a non-performing loan and corresponding impairment provisions have been made, and it is expected that it will not have a significant impact on current or future profits. This may indicate that: first, the relevant risks have been fully exposed and reflected in the financials; second, the bank has certain expectations regarding the final losses and has already made provisions. More critically, even with a first-instance victory, there is still a long way to go before actual funds are recovered. The defendant has the right to appeal within 15 days, and the case may enter the second-instance procedure. Even if the judgment ultimately takes effect, the uncertainty remains regarding whether recovery can proceed smoothly during the enforcement phase and what the recovery rate will be ## **The Asset Quality Enlightenment of Regional Banks** This lawsuit reflects the challenges faced by regional commercial banks in infrastructure-related loans. The project involved is a local ecological wetland PPP project—such projects have large investment scales, long recovery periods, and are highly dependent on local fiscal payment capabilities and project operational efficiency. **The final exposure of** **CNY 730 million** **in a single non-performing loan is by no means a small amount for regional banks**. Although Bank of Xi'An stated that it has made preparations and that it does not affect profits, the potential challenges of such cases and the tests on the risk control capabilities of local banks continue. Risk Warning and Disclaimer The market has risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. 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