The Agricultural Bank of China (ABC) saw its non-performing loan (NPL) ratio up 0.07 percentage points to 23.5 percent last year as it assessed bad loans more strictly to prepare for a share-holding reform.
The bank reported its NPLs at 817.97 billion yuan (116.9 billion U.S. dollars) as of the end of 2007 in its annual report published on Wednesday.
It attributed the NPL rise to a more rigorous standard of assessment in its move to straighten out loans in previous years before an upcoming reform that would allow it to introduce strategic shareholders and launch an initial public offering.
"All preparations are basically ready and the timing and conditions of the reform are almost ready," ABC president Xiang Junbo said earlier this month.
With the highest NPL ratio of China's "big four" state-owned commercial banks, the ABC is the only one that has not been listed.
Several Chinese lenders had transferred their policy-oriented business to the ABC in the country's bank reforms, which had left the ABC with 300 billion yuan of bad assets, Thursday's China Business News quoted ABC vice president Han Zhongqi as saying.
Targeting the underdeveloped rural market made it more difficult and complex for the ABC to complete the share-holding reform, said Xiang.
He said the bank would continue to serve agriculture, rural areas and rural residents as a business development strategy after the reform.
The bank has tried out financial services, such as micro loans, to better meet rural demand.
By the end of last year, outstanding loans rose 10.48 percent year on year to 3.48 trillion yuan, with farm-related credit making up 34.75 percent of the total, said the ABC.
Net profits surged 127.17 percent year on year to 11.87 billion yuan on growing interest and commission incomes, said the bank.
Source:Xinhua
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