China Construction Bank 1H profit up 31%

SHANGHAI: State-owned China Construction Bank Ltd., the country's third-biggest commercial lender, says its first half profit rose 31 percent, buoyed by higher income from fees and interest.

The Beijing-based bank reported late Sunday that profit for January-June was 92.8 billion yuan ($14.5 billion), or 0.37 yuan (6 U.S. cents) a share. Profit for the same period a year earlier was 70.8 billion yuan.

Like other Chinese lenders, the bank has benefited from rising interest rates and higher fees and commissions as it diversifies its revenue sources.

Interest income in the first half of the year rose 24 percent, while income from fees and commissions jumped 42 percent to 47.7 billion yuan ($7.5 billion).

The bank said it was strictly controlling lending to industries designated by the government as having excess capacity, such as iron and steel, coal and plate glass. Meanwhile, it boosted lending to small and medium-size companies.

Smaller businesses have usually struggled to get bank financing. Such lending increased 9.5 percent by the end of June over December of last year, compared with a 6.8 percent increase in total corporate lending.

Construction Bank, which is relatively heavily exposed to the property sector, also said it was limiting lending to local government investment entities, whose debts have ballooned in the wake of a binge of recession-fighting construction investments.

Lending to the real estate sector climbed a modest 4.1 percent in January-June, the bank said. - AP