BEIJING, Aug. 11 (Xinhua) -- Chinese banks may post lower half-year earnings this year due to increased provisions for bad loans and narrowing spreads, said Tuesday's China Daily.

Huaxia Bank, the first of China's major listed lenders to announce interim results, posted a 13.6-percent fall in net profit and a 11.3-percent decline in operating revenue. That could be a microcosm of the financial performance of 14 listed Chinese banks in the first half, the newspaper said.

Analysts estimated the first-half earnings are likely to drop some 3 to 7 percent from a year earlier despite whopping credit growth.

Chinese banks have advanced a total of 7.37 trillion yuan (about 1.05 trillion U.S. dollars) in new loans in the first six months to support the nation's stimulus policy for economic recovery, which has sparked concerns that such a credit surge may lead to a spurt in bad loans.

Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), the nation's top banking watchdog, had asked commercial lenders in mid July to adhere to the bottom line for bad loan provisions and raise provision coverage ratio to over 150 percent within the year.

China's commercial banks had a combined provision coverage ratio of 134.3 percent as of June, up 17.9 percentage points from the beginning of the year, according to the CBRC.

Four of the 14 listed commercial lenders, namely, Industrial and Commercial Bank of China, China Construction Bank, Bank of China and Shenzhen Development Bank, were yet to meet the regulatory requirement of 150 percent loss-loan coverage ratio by the end of the first quarter.

This may affect these banks' profitability in the first half as the funds set aside as bad loan provisions may increase significantly in the second quarter, analysts said.

Joint-stock lenders, such as Shanghai Pudong Development Bank and Minsheng Bank, with sufficient provisions for bad loans, could expect better profits in the first half, they said.

The nation's joint-stock banks are expected to release their first half results in the coming two weeks, followed by the top three state-owned banks, at the end of August.

Despite the dismal expectation on banks' mid-year results, analysts remained upbeat about banks performance for the year as a whole.