Quarterly profit of China Constuction Bank grew by 24%

Profit of China Construction Bank in the IV quarter of 2011 rose 24% to 30.2 billion yuan from 24.4 billion yuan a year earlier.

The bank’s rising profitability comes from China’s credit markets, where rates increased at the end of last year.

Net income from lending for 2011 totaled 304.6 billion yuan, up 21% more than last year’s levels. Revenue from customer service and the amount of collected commissions rose 32% to 87 billion yuan.

Borrowing costs stopped rising earlier this year, and the interbank lending market has even decreased, which indicates that in the profitability may also fall in the first quarter.

Last year, the Construction Bank has granted loans of 827 billion yuan, increasing the size of its portfolio to 6.5 trillion yuan. The volume of overdue loans increased for the IV quarter of 6.3 billion yuan to 70.9 billion, representing 1.09% of the total portfolio. The Bank has reserved for losses of 15 billion yuan, up 10% less than last year.

According to the People’s Bank of China, last year the country’s banks issued new loans of 7.47 trillion yuan, 6% less than in 2010. Average rate rose to 8.01% in December last year, increased 1.82% in 2011.