The Bank of East Asia yesterday reported a 17 per cent jump in profit for last year to $2.74 billion, driven mainly by healthy growth in its core lending business and property disposal gains. The results not only produced records for the second straight year, but were also well above a market expectation of $2.51 billion in earnings based on the average forecast of 20 brokers polled by Thomson Financial. Unveiling the results yesterday, chairman and chief executive David Li Kwok-po expressed optimism for the bank's further strong growth this year. 'Hong Kong business will keep on doing well, as the economy is improving, and so will mainland business,' Mr Li said. The bottom line was boosted by an 8 per cent growth in operating profit before impairment loss and a $365 million disposal gain on property sales - although the bank also booked an impairment loss of $210 million on vacant premises under new accounting standards. BEA retains at least three big surplus properties after the relocation of its operations departments to Millennium City 5 in Kwun Tong last year. But Mr Li said no decision had been made on whether to retain them for future use. Net interest income rose 4 per cent to $3.76 billion, which chief financial officer Daniel Wan Yim-keung attributed to the wider prime-interbank rate spread since July last year after a series of rises in prime lending rates. Mr Wan said at 1.85 per cent, net interest margin at the end of last year was down 10 basis points year on year, but up six basis points if the new accounting standards were adopted in 2004. Net interest income also gained from a high loan growth of 18 per cent last year, with particularly strong demand on the mainland. Profit contributed by its mainland business soared 74 per cent to $290 million on a 50 per cent growth in China loans and formed 11.6 per cent of total profit. Mr Li said the bank was well prepared for China business in light of further easing of restrictions and through organic growth, and possibly further equity investments. 'We will continue to expand aggressively in China this year and plan to convert all existing representative offices to full branches by the end of the year,' he said. The plan includes expanding the network of 23 branches on the mainland to 60 in the next five years. Earnings per share rose to $1.83 from $1.59. A final dividend of 93 cents was recommended, bringing the payout for the year to $1.26. Analysts said BEA's strong profit growth might not be matched by its rivals. BEA shares closed 1.64 per cent higher at $24.70 after unveiling its results.