(AP)
Updated: 2007-03-23 08:36

Bank of China Ltd., China's No. 2 commercial bank, said Thursday its 2006 net profit soared 65 percent, on accounting changes and strong lending growth.

The bank's net profit rose to 42.83 billion yuan (US$5.54 billion) last year, from a revised 25.92 billion yuan in 2005, it said in a statement.

The rise in earnings was higher than the average forecast of a 45 percent increase in net profit to 39.84 billion yuan from 17 analysts in a poll by Thomson Financial.

Net interest income for 2006 rose to 121.37 billion yuan from 101.01 billion yuan the previous year. Its net interest margin in end-2006 widened to 2.45 percent from 2.33 percent.

The bank said its nonperforming loan ratio at the end of last year fell to 4.24 percent from 4.90 percent at the end of 2005. Its capital adequacy ratio rose to 13.59 percent from 10.42 percent, it said.

Bank of China is second in size among China's commercial banks behind the Industrial & Commercial Bank of China Ltd.

The lender, the first of China's Big Four state lenders to list shares in both Hong Kong and the mainland, said it has achieved progress in modernizing its operations and management.

"By appointing experts from overseas to the board, we enhanced our governance structure as well as raised the operation of the board towards international standards," said chairman Xiao Gang in a statement.

"In the coming year, we will speed up internal reforms, proactively adjust our business strategies, and continue to perfect our corporate governance mechanism, so as to respond quickly to the changed operating environment," he said.