Russian banks' capital falls in May

MOSCOW, July 6 (Reuters) - Russian banks' capital fell by 0.5 percent in May, the first decline since August 2004, while growth in non-performing loans has slowed, data showed on Tuesday.

The country's 1,100-plus banks are struggling with losses as asset quality deteriorates while economy is facing its first contraction in a decade.

Total capital stood at 4.2 trillion roubles ($134.4 billion) as of June 1 while the capital adequacy ratio was at 18.4 percent.

Bad loans rose by 57 billion roubles to 782 billion roubles, making up 3.9 percent of the total portfolio.

Authorities expect the banks will need 500 billion roubles of fresh capital this year should bad loans breach level of 10-12 percent of total loans but assure the chances of the new banking crisis are negligible.

The 201 loss-making firms in the sector together posted a combined loss of 81 billion roubles in the first five months of the year, according to Russian accounting standards, while the 885 profitable banks made a combined profit of 118 billion roubles. ($1=31.24 Rouble) (Reporting by Dmitry Sergeyev; Editing by Hans Peters)