* Q1 net 34.07 bln yuan vs analysts' 33.26 bln f'cast
* Q1 net interest margin 2.79 pct vs 2.57 pct at end-2010
* NPL ratio at 1.76 pct at end-Q1 vs 2.03 pct at end-2010
* Capital adequacy ratio 11.4 pct at end-Q1, down 0.19 pct pts
* Shares up 20 pct in 2011, beating big board's 3.5 pct gain (Adds details of results, analyst comment)
By Kelvin Soh and Terril Jones
HONG KONG/BEIJING, April 27 (Reuters) - Agricultural Bank of China , the country's third-largest lender by assets, could face fundraising pressure as strong lending, underscored by the 36.4 percent jump in first-quarter net profit, erodes its capital base.
AgBank's capital adequacy ratio clocked in at 11.4 percent as its loan book expanded by 5.3 percent in the first quarter. China's banking regulators require its big banks to maintain a ratio above 11.5 percent.
"Compared to the other lenders such as ICBC and CCB, AgBank could face fundraising pressure within the next three years to shore up its adequacy ratio," said James Liu, an analyst at CIMB Research in Hong Kong.
"Its loan growth is likely to be higher than the other banks, and that will likely deplete its capital base more quickly."
Banks in China have been under pressure to control lending as the country tries to keep inflation under control, with rivals such as Industrial and Commercial Bank of China (ICBC) having already announced lower lending targets this year.
Any fundraising by AgBank would come after it raised over $22 billion in July in what was then the world's largest IPO.
Agricultural Bank recorded a 34.07 billion yuan ($5.2 billion) profit for the quarter, its biggest since going public. The profit was up from 24.9 billion yuan a year earlier and better than the average estimate of 33.26 billion yuan expected by seven analysts polled by Reuters.
"The bank improved the quality of assets continuously, and both outstanding non-performing loans and the non-performing loan ratio kept decreasing," the company said in a statement posted on the Hong Kong stock exchange website.
Net interest margins, which measures the profitability of loans, clocked in at 2.79 percent, higher than the 2.57 percent recorded at the end of 2010.
FEE INCOME IS BRIGHT SPOT
Further helping boost earnings was a rise in fee income from activities such as wealth management and bank cards, rising 63.5 percent to 17.75 billion yuan.
"Fee income represents the bright spot in the first quarter thanks to strong momentum across wealth management product sales, investment banking fees, clearing and settlement fees, bank cards, etc," Standard Chartered banking analyst Laurence Chen said in a note to clients before AgBank's earnings.
Non-performing loans stood at 1.76 percent, compared with 2.03 percent at the end of last year. There has been growing concern that NPLs may spike if there is an economic slowdown, as many banks extended huge loans in 2009 when China was trying to jumpstart its economy.
AgBank also said it had made sufficient provisions on its balance sheet for any possible default, with allowance to non-performing loans reaching 197.44 percent at the end of March, up 29.39 percentage points from the end of 2010.
China's other three biggest state-controlled banks - ICBC , China Construction Bank (CCB) and Bank of China - report their first-quarter results on Thursday.
The Hong Kong-listed shares of AgBank closed largely flat at HK$4.71 on Wednesday. The stock has gained 20 percent so far this year, outpacing a 3.5 percent gain in the Hang Seng Index . (Editing by Muralikumar Anantharaman)