THE Industrial and Commercial Bank of China said yesterday its first-half profit surged 57 percent to 64.5 billion yuan (US$9.38 billion), making it the world's most profitable bank.

While some top global banks are struggling to cope with the fallout from the US subprime mortgage crisis, most Chinese banks dodged trouble because their investment in securities tied to troubled home loans was limited.

But slower growth appears on the horizon for ICBC and the rest of the domestic banking industry, analysts said.

In other year-on-year comparisons, ICBC's bad loan ratio dropped 0.33 percentage points to 1.44 percent. Its provisions for non-performing loans rose 12.58 percentage points from the end of 2007 to 116.08 percent.

The bank's credit grew 6.8 percent to 3.99 trillion yuan amid the tight monetary policy in the first half.

Its interest margin, a measure of credit profitability, rose to 3.01 percent from last year's 2.8 percent.

The bank said its fee-based income was one of its main profit contributors. Fee-based income and commissions gained 48 percent to 24.48 billion yuan from a year ago. Fee income accounted for 15.8 percent of the bank's operational income, up 1.74 percentage points from a year ago.

Despite the sluggish capital market in the first six months, the bank managed to launch individual wealth management products valued at 1.16 trillion yuan, skyrocketing 123 percent from a year ago.

Subtracting first-quarter earnings from first-half profit, the bank's profit growth slowed to 41 percent in the second quarter from the first quarter's 77 percent.

"The bank's second-half profit growth will not be as strong as in the first," said Qiu Zhicheng, a Haitong Securities Co analyst. "China's whole banking industry is witnessing slower growth, and ICBC will be no exemption."