HONG KONG: Bank of China, the country's biggest foreign exchange lender, which is listed in both Hong Kong and the mainland, said lending would remain at a reasonable level in 2010, after government stimulus measures prompted a lending boom this year.

But the rate of lending growth next year would slow from this year's level, Li Lihui, the bank's president, said Friday.

"We will make the adjustment and optimization of lending structure as our priority in the next year," Li said, adding, "Meanwhile, we will ensure reasonable growth of loans."

Lending will not slow down significantly in 2010 because the infrastructure projects that banks loaned to this year would continue to need financing, he added.

"Demand for funds from some major projects as well as the economy's recovery will probably be relatively huge," Li said.

The Beijing-based lender on Thursday posted a 19 percent rise in third-quarter profit at 21.11 billion yuan, in line with market expectations, boosted by a lending boom in the first half of the year.

Computed in accordance with International Financial Reporting Standards, the bank's net profit in the first three quarters was 62.23 billion yuan, 3.82% more than in the same period of last year. Earnings per share were 0.25 yuan according to the bank's third-quarter results.

BOC's net interest income in the first nine months was 115.6 billion yuan, down 5.43% year on year. However, the lender's net income from fees and commissions rose 8.39% from a year earlier to 34.51 billion yuan.

BOC's outstanding loans and advances to customers were 4.7 trillion yuan at the end of the third quarter, 42.63% more than at the end of last year.

By the end of September, BOC's total assets were 8.34 trillion yuan, up 19.95% from the end of last year.

The bank joins rivals including Industrial & Commercial Bank of China (ICBC) and Bank of Communications in reporting a slowdown in loan growth in the third quarter, while net interest margins have stabilized. Net interest margins, which have already bottomed out, will continue to rise from the third quarter, Li said.

Though Morgan Stanley has recently upped its target price for Bank of China, the lender was downgraded to "Hold" from "Buy" by First Shanghai after the announcement of recent results.

China Daily/ agencies

(HK Edition 10/31/2009 page5)