Bank of China (Hong Kong) said Thursday its half-year profit fell by 5.6 percent from a year earlier, dragged lower by falling interest income amid the deepening economic downturn.

The bank's net profit for the six months ending June 30 amounted to 6.69 billion Hong Kong dollars, down from 7.09 billion Hong Kong dollars in the same period last year.

However, the bank said it represented a major improvement against the net loss of 3.75 billion Hong Kong dollars in the second half of 2008, which can be attributed to the increase in operating income as well as the decrease in impairment charges on securities investments.

Net interest income decreased by 11 percent to 8.93 billion Hong Kong dollars as net interest margin narrowed by 27 basis points to 1.76 percent. But the net fees and commission income grew by 1.7 percent year-on-year to 2.95 billion Hong Kong dollars driven by the rebound of the local stock market in the first half of this year.

The bank's vice chairman and chief executive He Guangbei said the performance in the first half of this year reflected the progress the bank had made in regaining its growth momentum. As the turbulence and its knocks-on effects began to subside, the bank would pursue a prudent yet flexible development strategy in an environment of change and challenge.

He also said BOC (HK) would actively expand the RMB-related banking business as the sole Clearing Bank for Renminbi business in Hong Kong.

(Xinhua News Agency August 28, 2009)