Bank of China Ltd.(stock code: 601988), the nation's second largest, said it has almost $9.7 billion of securities backed by U.S. subprime loans, the largest holding announced by any Asian bank.

The Beijing-based company set aside 1.15 billion yuan ($152 million) in the first half related to holdings linked to risky home loans, it said in a statement today. The securities are rated "A" or higher, Bank of China said. Bigger rival Industrial & Commercial Bank of China Ltd. today said it had $1.2 billion of subprime-related securities.

The collapse in securities backed by subprime mortgages has caused losses at lenders from Japan to Australia, helping send Asian banking stocks lower in the past month. Bank of China, which accounts for more than two-fifths of foreign currency advances by Chinese banks, was also weighed down by 1.2 billion yuan in foreign-exchange losses in the period.

"The foreign exchange exposure adds complexity and uncertainty to earnings, and it's why they're more exposed to those problems in the U.S.," Simon Ho, an analyst at ABN Amro Holding NV in Hong Kong, said before the announcement. "The impact of subprime may be sizable in the second half."

Net income climbed 51 percent to 29.5 billion yuan in the first half from a year earlier, Bank of China said in its statement to the Hong Kong exchange. That beat the 26.6 billion yuan average estimate of six analysts in a Bloomberg News survey.