China Construction Bank fourth quarter $3.73bn profit below expectation

The lender’s falls short of the expected $4.17bn forecast and posted a $610mn impairment charge.

China Construction Bank Corp (CCB) , China's largest mortgage lender, reported 2010 earnings that missed expectations and recorded a 4 billion yuan ($610 million) impairment charge, sending its shares down by the most in about four months.

CCB's Hong Kong-listed shares fell by as much as 2.9 percent in morning trade on Monday after the bank said it took the impairment on securities and off-balance sheet items.

"There is uncertainty in the market if this is an issue with asset quality or if they are just making provisions for tighter rules," said Patrick Pong, an analyst at Mirae Asset Securities in Hong Kong.

Further weighing on the shares was China's series of curbs on the booming real estate sector, although an improvement in interest margins due to a monetary tightening campaign by the central bank helped boost the lender's results.

"The environment for comprehensive operations will loosen, providing excellent opportunities for nurturing new businesses," CCB noted in a filing with the Hong Kong stock exchange. "The accelerated liberalisation of interest rates and exchange rates will also give the group greater freedom for financial innovation."

However, the expansion of its liability business is becoming more difficult amid tightening liquidity and the fluctuating capital market, CCB said.

View the full story in Reuters.