China's CITIC Bank H2 more than doubles

By Kennix Chim and Alison Leung

HONG KONG (Reuters) - CITIC Bank Corp, China's seventh-largest lender, beat analysts' expectations by more than doubling second-half 2007 earnings, riding a surge in fee-based income and widening interest margins.

But in 2008, the lender will have to grapple with tightening monetary measures, including a government edict to rein in lending, a rising risk of default among borrowers in key sectors as a weakening global economy takes its toll.

CITIC Bank, in which Spain's Banco Bilbao Vizcaya Argentaria

owns 4.83 percent, reported a net profit of 5.1 billion yuan ($725.8 million) in the second half of 2007 on Wednesday, compared with 2.1 billion yuan in the second half of 2006.

On average, seven analysts polled by Reuters had expected a 4.5 billion yuan profit in the final six months of 2007.

CITIC Bank, which raised $5.4 billion in a simultaneous IPO in Hong Kong and Shanghai in April last year, had forecast full-year 2007 earnings of at least 5.7 billion yuan during marketing for its listing.

Instead, 2007 earnings more than doubled to 8.322 billion yuan from 3.86 billion yuan in 2006, the firm said in a Chinese statement posted on the Shanghai stock exchange's Web site.

Analysts had forecast net profit of 7.74 billion yuan for the year.