Agricultural Bank of China's bad loans have reportedly risen due to stricter accounting rules, driving up the total of non-performing loans at state-owned banks.
The Beijing-based bank's non-performing loan ratio rose to 23.64 percent at the end of 2007 from 23.55 percent a year ago, Caijing magazine reported last Friday.
The bank's bad loans increased by 84 billion yuan last year to 816.1 billion yuan (US$113.4 billion) at the end of 2007, the report said.
The newly added bad loans are due to new methods of accounting for lending to the agricultural sector, and have driven up the combined bad-loan ratio among state-owned banks in the fourth quarter, Caijing's report said.
Bad-loan ratios at Chinese banks, including joint stock banks and overseas banks, dropped across 2007, except for state-owned banks, China Banking Regulatory Commission statistics showed.
The state-owned banks' bad-loan ratio kept dropping in the first three quarters of last year (8.2 percent in the first quarter, 8.14 percent in the second and 7.83 percent in the third) but rebounded in the fourth quarter to 8.05 percent. However, this is still lower than 9.22 percent in 2006.
The average bad-loan ratio at banks in China dropped from 7.09 percent to 6.17 percent last year.
Agricultural Bank of China declined to comment on the issue, noting that the bank, before a government bailout, is not comparable with rivals like Industrial & Commercial Bank of China.
Agricultural Bank is the last among the state-owned banks to start restructuring.
Xiang Junbo, former head of the Shanghai headquarters of the People's Bank of China and the former deputy governor, was appointed as president of Agricultural Bank last year to quicken the bank's restructure.
The government spent US$60 billion bailing out ICBC, Bank of China Ltd and China Construction Bank Corp in a three-step plan to restructure its state-owned banks. It plans to attract strategic investors before listing the banks.