Analysts yesterday welcomed a decision by China Construction Bank to make bigger loan-loss provisions for non-performing loans and previous state-directed policy loans. The bank revealed the extent of its 30.1 billion yuan (about HK$28.24 billion) loan-loss provisions while announcing a 16.5 per cent drop in pre-tax profit to 4.33 billion yuan, the mainland's official Financial News reported. The bank had reported a pre-tax profit of 5.19 billion yuan in 2001. The provisions, representing about 1.8 per cent of the bank's projected loan balance last year, were the highest among China's big four state banks. In Hong Kong, the average for last year was 1 per cent. Arthur Lau, China analyst at ratings agency Fitch, said yesterday: 'The move is a good sign that the bank is accelerating its drive to tackle bad debts through the write-offs.' The big four state banks have since last year been allowed to make bigger annual loan-loss provisions than just 1 per cent of their loan balances, following a Ministry of Finance directive. The ministry had earlier resisted such concessions because larger bad-debt write-offs by the state banks could translate into lower profits and hurt tax income. 'To take a larger loan-loss provision is a bold move for a state bank because it will sacrifice immediate profit,' Mr Lau said. Company spokesman She Chen said the bank wanted to reduce its 'historical bad-loan problems' to help meet requirements for an ultimate stock market listing. Beijing is looking at ways to rejuvenate the big four state banks by turning them into shareholding companies accountable to external investors. Both China Construction Bank and ICBC have expressed interest in partial or full listings in the future.