Bank of China Says Earnings Rise Last Year

SHANGHAI (Reuters) - Bank of China's (601988.SS) (3988.HK), the country's top foreign exchange lender, said on Tuesday its post-tax profit rose last year, rebutting a media report that its 2007 earnings might drop due to its exposure to U.S. subprime loans.

The Hong Kong-based South China Morning Post (SCMP) on Monday quoted Chinese banking sources as saying Bank of China was expected to make a big writedown of its investments in U.S. subprime-related securities in the fourth quarter of last year, which could drag down the bank's profit or even send it into the red in 2007.

In a filing to the Shanghai Stock Exchange, Bank of China said: "In line with our initial, unaudited 2007 operational data and taking into consideration ... provisions for possible subprime losses, our bank's post-tax profit will still rise in 2007 against the previous year.

"Our bank believes the SCMP report is completely groundless and we don't know its sources," the statement said.

On Tuesday, the Shanghai Stock Exchange suspended trading in Shanghai-listed local-currency A shares in Bank of China after the company failed to comment on an "important event," apparently referring to the SCMP report.

Bank of China's Hong Kong-listed H shares continued trading and closed down 8.6 percent at HK$3.11, while Hong Kong's blue-chip Hang Seng Index .HSI also plunged 8.7 percent amid global stock market weakness.

(Reporting by Lu Jianxin; Editing by David Holmes)