China's largest bank, Industrial and Commercial Bank of China (ICBC), lost more than 1 billion yuan (US$121 million) in loans made to a privately-owned firm in Guangdong's Nanhai city, the latest report from the China National Audit Office (CNAO) revealed yesterday.

Tian Ruizhang, ICBC's vice president, told Reuters that the bank investigated the loans in March.

According to CNAO's report, the private firm owned by a Mr Ma obtained loans worth 7.4 billion yuan (US$894 million) from ICBC's Nanhai branch by providing false financial information in a conspiracy with the bank's staff.

CNAO estimated ICBC had already lost more than 1 billion yuan from those loans. ICBC was also involved in about 30 cases of irregular loans worth 6.9 billion yuan, the report said.

Some Chinese bankers expect Beijing to inject US$100 billion into ICBC and the Agricultural Bank of China to help them recapitalize, paving the way for their listing.

(China Daily June 25, 2004)