The overseas arm of Bank of China posted a 9 per cent increase in second-half profit yesterday, beating expectations, on strong lending operations and a HK$705 million gain from an accounting rule change.

BOC Hong Kong (Holdings) Ltd, which also said it is in talks to buy its parent company's life insurance business, reported a 49-per cent increase in trading income due to the adoptation of new accounting standards.

The bank, which has a market value of US$21.3 billion, said it earned HK$6.97 billion (US$894 million) in last year's second half, compared with HK$6.38 billion in the year-earlier period.