The Ka Wah Bank yesterday kicked off the local banking sector's reporting season with a 28 per cent increase in net profit to $178.19 million for the first six months to June 30. The encouraging result from the Hong Kong financial arm of Beijing-controlled China International Trust & Investment Corp (Citic) came on a day when hopes for solid interim results from the banks in coming weeks helped push the Hang Seng Index 67 points higher. Ka Wah Bank shares rose 10 cents to $2.85. Director and president Song Yihan said the bank achieved satisfactory results during the first six months with net interest income increasing 28.4 per cent to $306.49 million from $238.68 million. The bank was also helped by a fall in interest expenses from $691.9 million to $624 million. Other operating income, however, fell 6.6 per cent to $98.63 million from $105.15 million. The bank's charge for bad and doubtful debts - an area of potential concern among the territory's banks - increased 2.6 per cent to $37.14 million. The company posted a net loss of $3.84 million on the disposal of tangible fixed assets and investments securities, against a gain of $700,000 previously. Earnings per share were up 27.57 per cent to 16.1 cents from 12.62 cents. Despite the increase in net earnings, directors did not recommend any interim dividend for shareholders. In February, the bank opened a Tuen Mun branch, bringing the total of the bank's Hong Kong branches to 34. It also purchased a 4,000 square foot-plus premises in Nathan Road, Kowloon, to relocate its Jordan branch. In March, the bank issued a US$70 million floating rate certificate of deposit. The issue had a maturity of five years with a put option at the end of three. The coupon was 45 basis points above the London interbank offered rate. Proceeds of the issue were used to bolster the bank's working capital, it said.