Citic Won't Guarantee Bear Stearns Deal

The statement coincides with Citic Securities' latest final earnings reports showing its 2007 net profit more than quintupled from a year earlier as the domestic stock market's bull run increased trading commissions and underwriting fees.

"We haven't signed any formal agreement, we haven't paid any money and we can't guarantee reaching a final agreement in the future," Citic Securities said in a statement.

It said it is still communicating with Bear Stearns on major terms of the deal and due diligence related to the deal has not been completed yet.

Citic Securities and Bear Stearns said in October that Citic Securities would take a 6 percent stake in Bear Stearns with an investment of $1 billion (euro640 million), while Bear Stearns would take a 2 percent stake in Citic Securities with a $1 billion (euro640 million) investment.

The Chinese company said it will closely monitor the impact from the U.S. subprime crisis and conduct an overall evaluation of the deal.

It said it will set the direction of its strategic cooperation with Bear Stearns based on the results of its evaluation and the development of the U.S. subprime crisis.

Citic Securities' earnings statement was in line with the comments from its corporate parent China International Trust & Investment Corp., or Citic Group.

Kong Dan, Chairman of Citic Group, said earlier in the day that its Citic Securities unit is rethinking its deal to buy into Bear Stearns and would conduct an "overall evaluation" of the deal.

Kong said Citic Securities would be closely watching how Bear is able to respond to a liquidity crisis and remained concerned about the bank's troubles, which began unfolding last year with subprime losses.