CCB was the last among the mainland's Big Four banks to unveil strong third-quarter results. Its bigger rival Industrial and Commercial Bank of China earlier reported profit growth of 27 per cent; Bank of China's earnings were up 29 per cent; and Agricultural Bank of China posted a 30 per cent profit increase.

All the major lenders raked in handsome interest income during the July-September period thanks to large net interest margins.

'Basically, the banking sector is living up to expectations amid rapid loan growth,' said Haitong Securities' analyst Qiu Zhicheng

Mainland banks extended a combined 6.3 trillion yuan of loans in the first nine months of this year, and they could grant another 1.2 trillion yuan of credit in the fourth quarter, based on the full-year target of 7.5 trillion yuan set by the regulator.

The quality of the assets held by Chinese banks is suspect, however, following a lending spree of 9.6 trillion yuan last year when Beijing embarked on an infrastructure-focused stimulus package aimed at providing a boost to the slowing economy. A statement by the China Banking Regulatory Commission yesterday said non-performing loans at mainland banks dropped 19.5 billion yuan from the second quarter, and stood at 435.4 billion yuan on September 30.

The sector's bad-loan ratio decreased to 1.2 per cent at the end of September from 1.3 per cent on June 30.

Bank of China announced a detailed plan for a rights issue yesterday, expecting to raise about US$9 billion on the Shanghai and Hong Kong stock exchanges.

CCB said on Thursday it received a regulatory approval to raise 75 billion yuan through share placements in Hong Kong and Shanghai.

Bank of Communications, the nation's fifth-largest lender, reported slower earnings growth in the third quarter on Thursday as it set aside more provisions for bad loans.

She Minhua, another analyst at Haitong, predicted all mainland banks would continue to set aside increasing provisions for bad loans in the coming quarters.

Separately, China Merchants Bank, the sixth-largest mainland lender, said yesterday made a profit of 7.38 billion yuan in the third quarter, up 53 per cent from a year earlier while Minsheng Banking saw its profit rise 46.5 per cent, earning 4.14 billion yuan.

Lending boom

Mainland banks have lent 6.3 trillion yuan so far this year

This is the amount, in yuan, of funds China Construction Bank plans to raise from a share placement: 75b yuan