China's 12 joint-stock commercial banks posted net profits at 45.2 billion yuan (6.61 billion U.S. dollars) in the first half of this year, down 19.3 percent year on year, an official from the country's banking regulator said.

Net profits of these lenders declined because loose monetary policy cut interest rate earnings and revenue on intermediary business fell amid economic slowdown, Xiao Yuanqi, director of the second supervisory division of the China Banking Regulatory Commission (CBRC), said Friday.

Margin on interest rates fell 81 basis points in the first half, Xiao said.

Xiao said there were signs of rising non-performing loans at these banks and non-performing loans might see big climb in two or three years.

These joint-stock commercial banks include CITIC Bank, China Merchants Bank, Minsheng Banking Corp., Huaxia Bank, Shanghai Pudong Development Bank, China Everbright Bank, Shenzhen Development Bank, Guangdong Development Bank, Industrial Bank, Evergrowing Bank, China Zheshang Bank, and China Bohai Bank.

He warned China's banks of assets quality risks because of a surge in new lending in the first six months, which hit 7.37 trillion yuan, as the government put into place the moderately easy monetary policy to boost the economy.

He said China's banks had similar assets structure, and they would face the similar risks.

CBRC Chairman Liu Mingkang urged the country's joint-stock commercial banks Friday to strengthen management over risks and closely monitor the flow of capital to prevent credit risk.

(Xinhua News Agency July 15, 2009)