Agricultural Bank of China (AgBank; 601288.SH, 1288HKG) announced its first quarterly profit decrease since it listed two years ago, owing to restrictions on lending and rising bad debt, Bloomberg reported. The bank’s income fell 14% to RMB21.2 billion (US$3.4 billion) in the fourth quarter of last year, down from RMB24.7 billion (US$3.9 billion) the year before and short of analyst expectations. AgBank has the highest non-performing loan ratio among China’s five largest banks and set aside some RMB22.8 billion (US$3.6 billion) in the fourth quarter to cover losses. “The provision charge for bad loans was more that what’s needed,” said Rainy Yuan, an analyst at Masterlink Securities. “That raises the red flag of potential asset-quality deterioration.” Song Xianping, the bank’s chief risk officer, told reporters that the risk of more borrower default may rise as liquidity conditions tighten in 2012.