Bank of China, the mainland's fourth-largest lender by market value, posted record net profit for last year, but an increase in bad loans in the past quarter stoked fears its asset quality and earnings outlook are deteriorating.
The bank earned 124.18 billion yuan (HK$152.94 billion) last year, up 18.9 per cent from 2010, buoyed by a higher net interest margin and soaring fee-based income.
The results met analysts' expectations but lagged behind the 26 per cent profit growth reported by bigger rival Industrial and Commercial Bank of China.
BOC's non-performing loans in the fourth quarter rose 1.4 billion yuan. Analysts described it as a bad sign, predicting bad debts would continue to grow this year.
By the end of December, non-performing loans were valued at 63.3 billion yuan and the bad-loan ratio climbed to 1 per cent from 0.99 per cent in the preceding quarter.
Core capital adequacy ratio stood at 10.07 per cent, above the 9.5 per cent minimum requirement likely to be implemented by the mainland banking regulator on July 1.