UPDATE 1-China approves AgBank restructuring plan

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BEIJING, Oct 21 (Reuters) - China's cabinet approved a plan on Tuesday for the restructuring of Agricultural Bank of China [ABC.UL], the last of the major state lenders yet to receive a capital injection from the government.

The State Council did not say how much money AgBank would get in the long-awaited restructuring.

Analysts expect AgBank's bailout could cost $100 billion or more, with $20-40 billion of that in the form of an infusion of capital from China Investment Corp, the country's sovereign wealth fund.

"AgBank should become a modern commercial bank marked by adequate capital, sound governance, strict internal controls, safe operation, quality service, strong profitability and international competitiveness," the cabinet said in a statement on the central government's website (www.gov.cn).

It added that it wanted AgBank to focus on supporting the development of the countryside, which is home to 750 million of China's 1.3 billion people.

The announcement comes days after the release of a government plan boost the rural economy through reforms such as allowing farmers to transfer their land-use rights.

The cabinet gave no other details on AgBank's restructuring, which should pave the way for an initial public offering.

The other three banks that have gone through a government injection and restructuring -- Industrial and Commercial Bank of China (601398.SS)(1398.HK), China Construction Bank (0939.HK) (601939.SS) and Bank of China (3988.HK) (601988.SS) -- took one-and-a-half to two-and-a-half years to list publicly.

More than 20 percent of AgBank's loans were non-performing as of the end of June, a legacy of its past role as a provider of politically driven credit to farmers and rural enterprises, making any bailout for it potentially more costly than for the other state lenders.

Bank of China and China Construction Bank each received $22.5 billion injections at the end of 2003, while ICBC received $15 billion in April 2005. (Reporting by Zhou Xin; Writing by Jason Subler; Editing by Anshuman Daga)