The Bank of China (BOC), 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 on Monday. Shares traded in Hong Kong tumbled 8.61 percent to HK$3.08 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.