* Net Q1 profit up to 53.4 billion yuan from 47.0 billion last year
* AgBank's NPL ratio stays flat at 1.22 percent
* Rise in NIM bucks long-term trend (Adds context, more details from earnings)
HONG KONG/SHANGHAI, April 25 Agricultural Bank of China Ltd (AgBank) , the country's third-largest listed lender, said on Friday first-quarter net profits rose 13.6 percent, beating estimates, due to strong growth in its net interest margin.
Interest margins are expected to fall in the long run for Chinese banks as China liberalises interest rates that guarantee a fat spread between the rate banks pay depositors, and the rate they lend at.
AgBank's rise in net interest margins in the first quarter to 2.96 percent from 2.79 percent at the end of last year likely reflects tight credit conditions at that time, where banks had additional bargaining power with borrowers.
Net profit for the quarter rose to 53.4 billion yuan ($8.55 billion) from 47.0 billion yuan in the same 2013 period, the bank said in its unaudited financial statement.
That compares with an average estimate of 46.59 billion yuan, calculated from a Thomson Reuters poll of eight analysts.
Net interest income was 103.1 billion yuan in the first quarter, an on-year increase of 15.5 percent while gains in net fees and commissions hit 26.9 billion yuan, a rise of 3.4 percent from the same period last year.
The bank's net interest margin was 2.96 percent at the end of the first quarter, up from 2.79 percent at the end last year.
AgBank is the second of the four biggest Chinese lenders to report first quarter earnings. Bank of China on Thursday beat market expectations in reporting a rise in net profits for the period of 13.9 percent.
Last month AgBank reported its slowest full-year net profit growth on record in 2013 as it bolstered provisions against an anticipated increase in bad loans.
AgBank's non-performing loan ratio remained flat at 1.22 at end-March compared to 1.22 percent at end-December.
The bank's shares closed down 1.23 percent in Hong Kong on Friday, ahead of the results announcement. ($1 = 6.2489 Chinese Yuan) (Reporting by Shanghai Newsroom and Gabriel Wildau, and by Lawrence White in HONG KONG; Editing by Miral Fahmy)