Agricultural Bank, the only one of the Big Four state-owned banks that has yet to undergo corporate governance reform and financial restructuring, disciplined 95 bankers after the audit, according to a National Audit Office report yesterday.

The audit office, which pledged greater transparency in its process, has been winning public accolades for its annual independent audits of selected government agencies and large state firms.

The report on Agricultural Bank yesterday appeared to be its first separate review on a leading state-owned financial institution released to the public and confirmed that the lender was the worst-managed of the four banks.

'The quality of Agricultural Bank's staff and corporate culture compares unfavourably even with the other state banks,' a foreign analyst said.

The audit of the 2004 accounts of Agricultural Bank's head office and 21 provincial branches last year unearthed 14.27 billion yuan in irregularities in deposit-taking business, including breaches of internal policies on account opening and misallocation of client deposits.

In addition, 27.61 billion yuan of loans were granted in violation of internal policies and procedures with the irregularities most common in car consumption, land reserve and discounted poverty-alleviation-related lendings.

The bank's Changping sub-branch in Beijing granted 460 million yuan of personal car loans to a company despite illegal loan guarantees and false information in loan applications.

Parts of the loans were then misappropriated by the company's head for investments in other cities, resulting in 121 million yuan of non-performing loans by September last year.

The audit office also criticised Agricultural Bank's local branches for their lax control over bank and commercial bill business which led to 9.71 billion yuan of bill irregularities.

Of the 2.47 billion yuan in bill transactions handled by the bank's Xinyang branch in Henan province in 2004, 89 per cent or 2.19 billion yuan was not backed by actual commercial transactions.

Of the lender's accounting problems, 1.18 billion yuan was the result of inaccurate reporting. A further 84.92 million yuan was hidden in slush funds.

The suspected criminal cases turned over to the authorities for further investigation involved two former top officials of a sub-branch in Sichuan who conspired with an employee of a domestic securities brokerage to obtain 132 million yuan of loans secured with stock holdings.

Of the loans, 118 million yuan was used for stock market speculation, resulting in 75 million yuan of losses.