China's ICBC 2007 profit surges on loan, fees

Industrial & Commercial Bank of China Ltd <1398.HK>, the world's biggest bank by market value, posted a stronger-than-expected 65 percent jump in 2007 profit on Tuesday, helped by widening interest margins and fee income growth.

ICBC <601398.SS> also said it held U.S. subprime mortgage-backed securities of $1.23 billion in terms of nominal value by end of December 2007, and the lender booked $400 million as an allowance for impairment losses accumulatively.

ICBC earned 81.52 billion yuan ($11.56 billion) in net profit in 2007, compared with 49.3 billion yuan in 2006.

After a bumper 2007, Chinese banks are expected to face a tougher market in 2008 as Beijing imposes curbs on lending and takes other steps in hopes of heading off inflation amid a surging economy.

On average, 23 analysts polled by Reuters Estimates had forecast earnings of 80.49 billion yuan, with a 16.99 billion yuan profit seen in the fourth quarter.

Hong Kong shares in ICBC were down 14.5 percent so far this year through Friday, compared with a 24 percent drop in the benchmark Hang Seng Index <.HSI> amid a rout in a global equity markets.

The shares rose 8.56 percent on Tuesday before the results report, against a 6.43 percent gain in the broader index.

(US$1=HK$7.8=7.0535 yuan)