China CITIC Bank plans $860 mln bad-loan write-off
* CITIC seeks shareholder approval to increase write-offs
* Bad loans expected to rise at other Chinese banks
* Aims to write off 5.2 bln yuan, double the amount of prior plan
* CITIC's balance sheet among weakest of mid-sized lenders
SHANGHAI, Dec 13 (Reuters) - China CITIC Bank , the country's seventh-largest lender, said it aims to more than double its planned bad loan write-offs this year to around $860 million - the latest sign of rising delinquency after slower economic growth.
CITIC's bad loan situation is among the worst of mid-sized Chinese banks. Its non-performing loan ratio stood at 0.90 percent at end-September, above the average 0.83 percent ratio for other so-called joint-stock banks, an official category for mid-size lenders.
It will ask for shareholder permission to write off 5.2 billion yuan in non-performing assets, up from a previous plan of 2 billion yuan, citing the economic downturn.
The bank's balance sheet has also deteriorated markedly this year. It held 17.0 billion yuan in non-performing loans at end-September, up 39 percent since the start of the year, it said in its latest quarterly report.
Its ratio of loan-loss provisions to total loans stood at 2.09 percent, down 0.03 percent from end-2012 and below the 2.50 percent ratio required by China's banking regulator.
CITIC said, however, the write-offs would not affect its net profit for 2013 because they will reduce tax liability.
It's not clear to what extent CITIC's situation is representative of other Chinese banks. While CITIC's loan portfolio may have fared worse than that of other banks this year, the rise in reported NPLs could also reflect a more active policy of recognizing and writing down bad loans.
Official data shows China's system-wide non-performing loan ratio stood at 0.97 percent at end-September, barely above the 0.95 percent ratio at end-2012, but most analysts believe the true ratio is higher. Banks can disguise bad loans by extending maturities or offering new loans to roll over old ones.
Chinese banks are under pressure to raise capital in order to absorb an expected rise in bad loans and to meet tough new capital adequacy standards that the regulator began phasing in this year in line with global rules known as Basel III.
CITIC said in August it would issue as much as 37 billion yuan in subordinate debt, which counts as tier-2 capital under China's Basel III rules. The bank said the issuance will occur before the end of 2015. ($1 = 6.0711 Chinese yuan) (Reporting by Gabriel Wildau; Editing by Edwina Gibbs)
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