The Bank of China, the nation's second largest lender, on Tuesday denied reports that it might post sharply lower profits or even a loss in 2007 due to investments in securities linked to US subprime mortgages.

"The reports were groundless," said a statement from the bank.

"The bank's after-tax profit continued to grow in 2007, taking into consideration provisions made for subprime-linked assets."

Trading in the Bank of China was suspended on the Shanghai Stock Exchange on Tuesday pending a profit announcement.

The bank's shares lost 4.14 percent, falling to 6.25 yuan (0.86 US cents) on Monday. Shares traded in Hong Kong tumbled 8.61 percent to 3.08 Hong Kong dollars on Tuesday after falling 6.39 percent on Monday.

The bank reported a net profit of 45.5 billion yuan for the first three quarters in 2007 under international accounting standards, up 40.1 percent from the same period a year earlier.

(Xinhua News Agency January 23, 2008)