Great Wall was established to resolve NPLs from the Agriculture Bank of China (ABC), one of China's big four State-owned banks.

The 2 billion yuan package involves more than 600 borrowers in Guangdong Province, a booming economic region in southern China. They are from various industries including agriculture, real estate, machinery, trades, building materials and food processing, Citigroup said in a statement.

The terms still remain subject to government approval.

Citigroup anticipates resolution of the portfolio through its global asset servicing company, Umbrella Asset Finance Limited and with the support of Great Wall, the statement said.

Heavy NPLs are now a great concern for China's banking industry, as the sector is set to open by 2007 according to terms in its World Trade Organization pact.

ABC, together with the Industrial and Commercial Bank of China, China Construction Bank and the Bank of China are the country's big four State-owned-banks, which dominate the domestic banking industry with an estimated 60 to 70 per cent share.

The average NPL ratio of the big four fell 5.85 percentage points last year to 20.36 per cent, according to the China Banking Regulatory Commission.

In 1999, four asset management companies (AMCs) including Great Wall were set up to help resolve the NPLs with the big four.

A total of 1.4 trillion yuan (US$168 billion) worth of NPLs have been transferred into the four AMCs, which are expected to dispose of these NPL portfolios by 2009. But the disposal of the bad assets has remained slow since then.