Bank of Beijing to buy $18 mln city bank stake

SHANGHAI, April 7 (Reuters) - Mid-sized Chinese lender Bank of Beijing (601169.SS) said on Monday it had agreed to pay 127.5 million yuan ($18.2 million) for a 19.99 percent stake in smaller Langfang City Commercial Bank.

Bank of Beijing, in which Dutch financial services group ING Groep (ING.AS) holds a minority stake, said it expected a return on the investment of more than 20 percent in the next three years.

Langfang, based in the northern province of Hebei neighbouring Beijing, booked a net profit of 143.67 million yuan on revenues of 518.40 million yuan in 2007, Bank of Beijing said, adding that it would pay for the purchase with internal funds.

Separately, Bank of Beijing said its own net profit in 2007 surged 56 percent to 3.35 billion yuan as revenues climbed 31 percent to 7.64 billion yuan. It cited strong growth in both net interest income and fees. The earnings were in line with a preliminary statement made by the bank in early January. ($1 = 7.01 yuan) (Reporting by Alfred Cang; Editing by Anne Marie Roantree)