UPDATE 1-Bank of East Asia issues credit cards in China

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SHANGHAI, Dec 23 (Reuters) - Bank of East Asia (0023.HK), Hong Kong's fifth biggest lender by market value, said on Tuesday it became the first foreign bank to independently issue yuan-denominated credit cards in China.

The move, which followed the bank's issuance of yuan-denominated debit cards in May, would help boost Bank of East Asia's consumer lending business in China.

"Credit cards can help us cross-sell our banking products," China Vice Chairman Chan Kay-cheung told a news conference in Shanghai.

"China is less impacted by the financial crisis than U.S. and European markets. We will continue to expand to benefit from China's fast growth."

Rivals HSBC Holdings Plc (HSBA.L) and Citibank (C.N) now issue credit cards in China jointly with their local partners.

Bank of East Asia, which in September saw panicky customers queuing to take out their cash amid talk the lender was in financial trouble, has warned that its annual profit would fall substantially on the forced disposal of a spiralling debt portfolio.

The lender, more than 9 percent owned by Spain's Criteria Caixacorp (CRIT.MC), said in October that it registered a further decrease in the fair value of its collateralised debt obligations (CDO) portfolio since June, forcing it to dispose of the entire portfolio. Losses from the move this year would be HK$3.5 billion ($451 million), it said.

Bank of East Asia shares have lost 70 percent this year, compared with a 51 percent drop in the benchmark Hang Seng Index .HSI.

(Reporting by Samuel Shen and Pilly Zou, Editing by Jacqueline Wong)