HONG KONG/BEIJING, Oct 27 (Reuters) - Industrial and Commercial Bank of China (ICBC) , the world's biggest bank by market value, said its third-quarter net profit rose 28 percent, helped by the growth of interest-generating assets and a strong increase in fee income.

ICBC made a net profit of 54.36 billion yuan in July-September, it said in a filing to the Hong Kong stock exchange, in line with an average forecast of 54.5 billion, according to a Reuters poll of 12 analysts.

"I thought the revenues were a little bit light, but they made up for that with lower provisions," said Mike Werner, an analyst at brokerage Sanford Bernstein. "That's how they got to their mark."

Overall, ICBC's results "were quite well balanced," said Victor Wang, an analyst with Macquarie Securities.

ICBC's core capital adequacy ratio increased 20 basis points to 10.03 percent. "This bank's core capital ratio is gradually trending up because of high profitability and conservative credit growth strategy," Wang said.

Werner also saw ICBC's reported capital ratio as one of its strong points.

"For everybody else who reported who didn't raise capital in the third quarter, we saw declining capital ratios," he said. "Some of these other banks are looking like they increasingly need to raise capital, and ICBC is not one of them."

ICBC's Hong Kong-listed shares have fallen by more than a fifth since the beginning of this year over worries about a slowing Chinese economy and rising bad loans. The benchmark Hang Seng Index has fallen 14 percent during the same period.

The bank, in which Goldman Sachs holds a 3 percent stake, saw its non-performing loan ratio fall 4 basis points to 0.91 percent at the end of September from 0.95 percent at the end of June.

Fears have been rising that loans doled out during the 2008 financial crisis could sour in large numbers if China's economy slows, especially those made to local government financing vehicles and the railway ministry.

NON-PERFORMING LOANS

The current share price of China's so-called "Big Four" lenders suggest that the market is pricing a non-performing loan ratio of up to 12 percent, Standard Chartered said in a note earlier this month.

China's economy grew at its slowest rate in two years in the third quarter of this year, raising fears that the country could be headed for a hard landing which would lead to a spike in bad loans.

But for ICBC, fee and commission income rose 43 percent from a year ago to 78.3 billion yuan. "Fee income growth over nine months was quite decent," Wang said.

ICBC's investment banking arm ICBC International snagged several high-profile deals including acting as joint bookrunner for CITIC Securities' $1.7 billion Hong Kong share sale.

The bank's net interest income, which measures the profitability of loans, rose 20.5 percent to 267 billion yuan, helped by a widening net interest margin.

Higher interest rates typically help banks by allowing them to charge more for loans. Deposit rates are capped in China.

Also on Thursday, Bank of Communications , China's fifth-largest lender, said its third-quarter profit rose 31 percent to 12.02 billion yuan, ahead of forecasts, while No.7 China Minsheng Banking Corp said third-quarter profit soared 80.3 percent to 7.47 billion.

While ICBC's net interest margin growth was not particularly impressive, "for most of the other banks interest margin expanded rapidly, such as 10 basis points for Minsheng and 20 basis points for CITIC," Wang said. "It tells us they still have the ability to price loans at the high end."

On Wednesday China's third- and fourth-largest banks reported third-quarter earnings. Agricultural Bank of China beat its forecast with profit up 40 percent to 34.1 billion yuan, while Bank of China missed the consensus estimate with profit rising a less-than-expected 9 percent to 29.79 billion yuan.

China Construction Bank , the world's second-largest bank by market value, is expected to report its third-quarter results on Friday.