China's Industrial Bank Needs $50 Billion Bailout, Fitch Says

Industrial & Commercial Bank of China, the nation’s biggest lender by assets, needs at least $50 billion to clear its bad loans, more than three times a bailout announced yesterday, Fitch Ratings said.

The central bank bailout is a third less than that provided to Industrial Bank’s two biggest competitors in December 2003, leaving the Beijing-based lender needing to seek private funding to boost its capital to the minimum required by regulators.

“We can’t see any other possible alternative but another capital injection,” by the central bank, said David Marshall, Hong Kong-based managing director at Fitch, a credit rating company. “Maybe they are fudging it a bit by injecting some money now and the bank has to meet certain targets and then they’ll put in more money.”

China’s top four banks had $188 billion of bad loans at the end of September, 15.7 percent of total lending, a figure that is swelling as the government moves to slow an economy growing at record pace.

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