BANK of East Asia reported less-than-satisfactory interim results yesterday, with profits up 21.8 per cent from last year to $198 million. While analysts conceded the bank's profit was ''decent'' and ''respectable'', they said they were somewhat disappointed. Some investment analysts even recommended a sell on the shares or a switch to other banks. ''The figure shows that the bank is slowing down its balance sheet expansion in Hongkong. It may be due to the difficulty in attracting deposits, which hinders loan growth and affects the interest margin,'' said John Doyle, investment analyst at Mees Pierson Securities. He believed the shares were overvalued. The bank's price-earnings multiples has gone from 10.3 in 1991 to 18.5 in 1992 and 23 this year. ''I don't think its fundamentals support that high PE figure,'' he said, in recommending a switch to Hongkong Bank. Lehman Brothers decided to downgrade its estimate for the bank because ''the magnitude of the earnings slowdown is far greater than we had expected''. It attributed the poor result to the bank's high exposure to residential mortgages which showed a significant slowdown in the past few months. Other factors included slow growth in trade finance and a higher-cost wholesale deposits. ''We believe that it may be difficult for the bank to improve its performance in the second half due to the more cautious mood in Hongkong, as a result of China concerns,'' the Lehman Brothers report stated. However, analysts also pointed out that the released figure might be skewed. ''Historically, the bank's interim result represents only one-quarter of the profit for the whole year. You can't just double the interim figure to get the year-end one,'' Nomura Research Institute financial analyst Richard Fairgrieve said. He adjusted downward his original estimate on the bank's year-end profit growth from 30 per cent to 25 to 27 per cent. ''It will still be a good year for the bank but not quite as good as before.'' He expected the bank to face keen competition from Guoco which has just acquired the Overseas Trust Bank, overtaking Bank of East Asia to become the third-largest banking network in Hongkong. Salomon Brothers investment analyst Alvin Chong found the result disappointing. ''The bank has been expanding in an aggressive way, with its rate of loan growth higher than the market's. This has stretched its liquidity position. ''Since long-term funding is difficult to get, the maturity mismatch risk gets higher. Perhaps part of the funds raised in the share placement late last year were used to plug the liquidity gap,'' he said. He recommended a switch to Hang Seng Bank. The bank also said it had established a sponsored American Depositary Receipt programme in the United States. Bank of New York was appointed as depositary bank while Bank of East Asia is the custodian in Hongkong. The bank said that despite the uncertainty over both a Sino-British agreement on future elections and renewal of China's Most Favoured Nation status by the United States, the economy's growth momentum was sustained. The bank noted that re-export activity was buoyant, with a real growth rate of more than 20 per cent. Strong growth in trade activity and a gradual recovery in the local property market supported the continued gains in domestic loans for local banks, it said.