China Shenzhen Bank sees 2008 net down 77 pct

(Adds details, background)

SHANGHAI Jan 12 (Reuters) - Shenzhen Development Bank 000001.SZ, a mid-sized Chinese bank, on Monday estimated that net profit plunged 77 percent to about 600 million yuan ($88 million) last year on big loan provisions and write-offs.

The bank, partly owned by U.S. private equity firm Newbridge Capital [NB.UL], said it made the provisions and write-offs in response to Chinese regulators' guidance for small and mid-sized banks. Guidance was tightened late last year as the global financial crisis worsened.

The estimate for full-year profits contrasted sharply with the first half of last year, when Shenzhen Bank's net profit rose 91 percent to 2.14 billion yuan.

The bank said it would make about 5.6 billion yuan of fresh provisions for bad loans in the fourth quarter of 2008 and write off 9.4 billion yuan, leaving its bad loan ratio below 1 percent, down from 4.3 percent at the end of last September.

Before the provisions and income tax, Shenzhen Bank's operating profit rose 40 to 42 percent last year to between 8.1 billion and 8.2 billion yuan, thanks to strong growth in lending, profitable bond investment and rising income from intermediary business, the bank said.

It estimated that its capital adequacy ratio remained above 8 percent at the end of last year, but added, without giving details, that it had set capital-raising plans for this year with the goal of lifting the ratio to 10 percent.

A small number of other Chinese banks have also made preliminary earnings estimates for 2008, but have not predicted large drops. Shanghai Pudong Development Bank (600000.SS) said last week that it expected to report a 128 percent jump in net profit for last year.

Shenzhen Bank is due to release a complete 2008 earnings report in late March. ($1 = 6.83 yuan) (Reporting by Andrew Torchia; Editing by Jon Loades-Carter)