BEIJING – Another major Chinese bank reported double-digit profit growth Thursday as it avoided the credit crisis that has battered Western lenders but warned it might face tougher conditions in coming months.

Bank of China Ltd., the country's third-largest lender by assets, said profit for the six months ending June 30 rose 43 percent year-over-year to 42.2 billion yuan ($6.2 billion) on revenue of 118.9 billion yuan ($17.4 billion).

China's biggest lender, Industrial & Commercial Bank of China, and No. 2 Construction Bank of China earlier reported similar large jumps in quarterly profit.

“We were able to achieve sustained and rapid development across various business lines in the first half of the year,” Chairman Xiao Gang said in a statement.

Interest income rose 15 percent to 81.5 billion yuan ($11.9 billion) while income from fees and commissions doubled to 37.3 billion yuan ($5.4 billion), the Beijing-based lender said.

The bank said efforts to expand consumer-oriented businesses grew strongly, with spending by holders of Bank of China credit cards rising by 35 percent. The bank said it had 14 million credit cards and 117.7 million debit cards outstanding as of June 30.

But President Li Lihui warned that the bank faces uncertainty in the second half due to possible tighter government controls on lending to tamp down inflation.

“We expect various financial risk factors and economic uncertainties to increase, putting considerable pressure on the management of our bank's operations,” Li said in the statement.

Bank of China is the biggest Chinese commercial owner of U.S. subprime debt but said its $3.6 billion in such securities accounted for just 1.5 percent of its total holdings. It recorded a $1.9 billion impairment allowance for possible losses.

The bank said it cut its holdings of securities issued by troubled U.S. mortgage lenders Freddie Mac and Fannie Mae to $7.5 billion as of this week, down from $10.6 billion on June 30. It said all principal and interest payments were on schedule.

The bank also said it cut holdings of mortgage-backed securities guaranteed by those two agencies to $5.2 billion as of this week, down from $6.6 billion on June 30.

The bank will follow developments in the U.S. mortgage market “and assess impairment on related debt securities in a prudent manner,” the statement said.

On the 'Net:

Bank of China Ltd.: www.boc.cn

(jrm)