Bad debt charges may triple for Aussie banks

(Repeats ahead of Australian market opening)

By Mette Fraende

SYDNEY, Sept 11 (Reuters) - Bad debt charges for Australia's top banks are expected to triple to more than A$7 billion ($5.6 billion) this year, as more borrowers struggle to repay loans and asset values fall as the economy slows.

Top lender National Australia Bank (NAB.AX) and No. 3 Australia and New Zealand Banking Group ANX.AX are considered most vulnerable, banking analysts say; NAB because of its structured debt and UK exposures, and ANZ for its exposure to commercial lending and to New Zealand, whose economy has quickly deteriorated.

"When you got a cyclical decline in the economy, all banks will end up being hit," ABN AMRO banking analyst Jarrod Martin said.

Australia's Big Four banks had been largely unscathed by the first year of the global credit crisis apart from facing higher funding costs, unlike their peers in the United States and Europe which have been forced to writedown billions of dollars due to slumping home mortgage markets.

Australian banks still rank among the strongest in the world in terms of asset quality, all carrying AA-ratings from major rating agencies.

But as the credit crunch drags into its second year, both NAB and ANZ have warned profits could slide amid mounting credit-related losses, and analysts say further writedowns could be announced between now and the next results announcements in October. Australian banks end their financial year on Sept 30.