China Construction Bank Corp., one of China's top state-owned banks, said Sunday that its first-half net profit rose 47.5 percent from a year earlier thanks to higher interest and fee-based income. The bank, China's biggest housing lender, reported a net profit of 34.2 billion yuan (US$4.5 billion; ¤3.3 billion) in January-June, up from 23.2 billion yuan (US$3 billion; ¤2 billion) in the first half of 2006. «The group capitalized on the opportunities brought about by China's robust economy and the booming capital market, and achieved steady growth in both assets and liabilities and notable improvement in profitability,» the bank said in a statement. It noted efforts to improve risk controls and expand small businesses and personal credit loans. The Beijing-based bank, in which Bank of America Corp. holds an 8.52 percent strategic stake, reported its net interest income from lending was 89.2 billion yuan (US$11.7 billion; ¤8.6 billion), up 37 percent from 65.3 billion yuan (US$8.6 billion; ¤6.3 billion) a year earlier. The lender's net fee and commission income more than doubled to 12.7 billion yuan (US$1.7 billion; ¤1.3 billion). Like other major Chinese lenders, the Construction Bank said it did not expect its exposure to subprime-linked securities to pose a threat to its financial health. The bank said it held subprime mortgage loan-backed securities worth US$1.06 billion as of June 30 _ all with ratings of AA or above. That amounts to about 0.1 percent of the bank's total assets of 6.12 trillion yuan (US$809.5 billion; ¤594.6 billion). «These securities are expected to have limited impact on the group's operating results for the year,» the bank said. Allowances of 139 million yuan (US$18.3 million; ¤13.4 million) were set aside for potential losses, it said. China Construction Bank raised US$9.2 billion in an initial public offering on the Hong Kong Stock Exchange in October 2005. It announced last week that its shareholders had approved a plan to list yuan-denominated shares on a mainland bourse.
