Wing Lung Bank announced a year-on-year 27.7 per cent decline in first-half profit, but the bank said it was strong enough to resist the temptation to merge. Attributable profit in the six-month period ended on June 30 amounted to $344.49 million, the bank said. Wing Lung attributed the sharp decline in its earnings to a rapid increase in interest expenses and provisions charges. Chairman Michael Wu Po-ko said he expected more bank mergers, as some banks sought to strengthen their balance sheets to survive Asia's economic downturn. But vice-chairman Patrick Wu Po-kong said Wing Lung would strengthen its operations in a bid to survive the crisis. Executive director Philip Wu Po-him pointed out that family-owned banks such as Wing Lung had become less averse to merging because they had become aware of the benefits that could be derived from forming bigger operations. Still, he said: 'We've been running our business for more than 60 years. 'If we keep on running it in the way we did before, we can survive for another 600 years.' Executive director and general manager Chung Che-sum said high interest rates in the first half of this year increased Wing Lung's interest expenses 44.2 per cent from a year earlier. By comparison, he said, interest income increased only 23.7 per cent. Consequently, he said Wing Lung's net interest income declined 12.7 per cent from a year earlier to $531.35 million, and its net interest margin fell 36 basis points to 2.2 per cent. The bank's profit was hit further by an increase in a provisions charge, to $72.68 million from $22.39 million, most of which came from trade-finance and corporate-loan exposure. Non-performing loans, on which interest is suspended or interest accrual has ceased, jumped to $224.97 million from $10.25 million. These loans were covered by collateral with an aggregate value of $153.81 million. Also, the bank's ratio of non-performing loans to total loans jumped to 0.78 per cent from 0.04 per cent. Earnings per share were $1.484, down from $2.083 cents last year, and the bank will pay an interim dividend of 30 cents.