Millions of dollars of nonperforing loans weigh down bank balance sheets across Asia. But by using a variety of standard accounting practices, some banks have been able to hide much of this red ink - Putting at risk the future of the banks and investors alike

Government created Asset-management companies such as Korea Asset Management and Thai Asset Management have removed millions of dollars of bad debt from bank balance sheets over the past few years. But some Asian banks are hiding millions more in doubtful debt by making use of what analysts say are fairly common fudging techniques.

Eventually, analysts say, the debts will have to be written off, hitting bank earnings for the next few, years Almost every major regional bank outside Hong Kong and Singapore has used one technique or another, say analysts. SG Asia Credit analyst Andrew Stotz estimates that in Thailand the provisions banks will have to make to cover for their favorable treatment of undeserving debtors will total 50% of pre-provision profits, for each of At banks that are taking more aggressive steps, the hit on profits is more dramatic, if less drawn out. Take Chohung Bank in Korea, which will post a net loss of 100 billion won ($85 million) for 2002, compared to a net profit of 522.5 billion won in 2001, estimates Barclays Capital.