--File--Pedestrians walk past an advertisement for Bank of Communications (BoCom) in Shanghai, China, 27 August 2011. Bank of Communications Corp., the countrys fifth-largest lender by assets, Thursday (30 August 2012) reported an 18% increase in its first-half net profit, its slowest pace in two years, as Chinas economy slows and a more flexible monetary policy weighs on its net interest margin. The banks results are in line with those of its peers such as Bank of China and China Construction Bank, which reported a sharp slowdown in profit growth. The bank said its net profit for the six months ended June 30 was 31.09 billion yuan (US$4.9 billion), up from CNY26.4 billion a year earlier. The state-run bank, also known as BoCom, said its net interest income, which accounted for more than 70% of its operating income, rose to CNY58.39 billion from CNY49.58 billion, and net fee and commission income rose to CNY10.96 billion from CNY9.76 billion. Despite declining loan demand from companies, BoCom still delivered a solid profit, helped by a robust net margin that was sustained by Chinas interest rate regime, which still sets a ceiling and a floor in pricing deposits and loans after the relaxation in June and in July.
