Profits rise for China Construction Bank

26 March 2012

The world's second biggest bank by market capitalization has posted marked profit increases for 2011.

China Construction Bank (CCB) revealed 25 per cent growth for the 12-month period, rising to 169 billion Chinese Yuan ($26.8 billion) from the 135 billion Chinese Yuan recorded in 2010.

Despite these figures, the lender noted it is currently facing a number of challenges as a result of difficulties posed by both domestic and global economies.

In a new release relayed by the BBC, CCB stated: "Commercial banks face various risks including possible bursting of the real estate bubble [and] increased risks involved in cross-border investment by enterprises."

On top of concerns regarding the possibility of a significant increase in loan defaults, the financial institute also warned a number of businesses may experience operating difficulties as 2012 rolls on.

CCB - which was formed as a joint-stock commercial bank in 2004 - observed a lower fee income and worsening credit quality in the fourth quarter of last year might also pose problems.

By Asim Shah

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