* Q4 net profit 24.72 bln yuan vs 20.63 bln expectation
* 2010 net profit 94.87 bln yuan vs 64.9 bln yr ago
* Net interest margin 2.57 pct at end-2010 vs 2.28 pct
* Non-performing loans 2.03 pct at end-2010 vs 2.91 pct
* Hong Kong shares down 1.9 pct before results announcement
(Adds details, analyst quotes)
By Kelvin Soh
HONG KONG, March 29 (Reuters) - Agricultural Bank of China (1288.HK), the country's No. 3 lender by assets, reported a forecast-beating 83 percent rise in quarterly profit on Tuesday, helped by a widening net interest margin as it doled out loans to its core rural clients.
AgBank (601288.SS) posted a 24.72 billion yuan ($3.77 billion) profit in October-December, up from 13.51 billion a year ago and beating market expectations for a 20.76 billion, according to a poll of 24 analysts by Thomson Reuters I/B/E/S.
The company made a full-year net profit of 94.87 billion yuan, compared with 64.9 billion in 2009, it said.
"AgBank's growth is likely to moderate this year," said Alexander Lee, an analyst at DBS Vickers who has a "buy" rating on the stock. "It was coming off a smaller base last year, and with lending likely to slow, we won't see such big numbers anymore."
Bank of China (3988.HK) (601988.SS), the nation's No. 4 lender by assets, last week beat expectations to report a 33 percent rise in fourth-quarter net profit, helped by a growing loan book and widening net interest margin. [ID:nL3E7EN04J]
But No. 2 lender China Construction Bank (CCB) (0939.HK) (601939.SS) missed expectations with an 18.6 percent rise in quarterly profit. [ID:nL3E7ES00T]
"China's economy faces the challenge of having to transform itself while maintaining its growth," AgBank said in a statement to the Shanghai stock exchange.
"Due to the changes in the economy, we expect domestic spending to rise, infrastructure spending to fall and growth in exports to slow this year." <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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Like CCB and ICBC (1398.HK), AgBank lent aggressively in 2010, helping fuel the country's 10.3 percent economic growth.
But Beijing is trying to prevent the economy from overheating and has resorted to raising reserve requirements for the banks, which would slow credit growth, and interest rate hikes. It has already hiked rates twice since Christmas.
AgBank's net interest rate margin rose to 2.57 percent at end-2010 from 2.28 percent a year ago, spurring optimism that it may rise even higher in an environment that is expected to see more rate hikes this year.
"The effect of any interest rate hike on AgBank is likely to be smaller than the other banks because of its lower loan-to-deposit ratio," said DBS Vickers' Lee.
Its non-performing loans fell to 2.03 percent of overall lending from 2.91 percent at the end of 2009. However, the percentage of NPLs classified as lost rose 3 basis points to 0.15 percent.
The bank has traditionally had the highest NPL ratio among China's four major lenders because of its history of lending to rural causes. By comparison, bigger rival China Construction Bank had a non-performing loan ratio of 1.14 percent at the end of 2010.
AgBank's Hong Kong-listed shares have risen about 28 percent since going public in July 2010, in what was then the world's largest IPO at $22 billion. The benchmark Hang Seng Index .HSI has risen 14 percent over the same period.
Its Hong Kong shares closed 1.91 percent lower on Tuesday ahead of the results, versus a flat performance of the Hang Seng Index .HSI. (Editing by Muralikumar Anantharaman and David Cowell)