CHINA Construction Bank, the world's second largest by market value, yesterday posted a 25.48 percent jump in 2011 net profit from the previous year on wider net interest margin as well as rising fee and commission income.

The net income for the nation's second-largest lender rose to 169.4 billion yuan (US$26.7 billion) last year as its net interest margin widened to 2.7 percent from 2.5 percent in 2010. The bank also benefitted from a 31.55 percent annual jump in fees and commissions.

But CCB's net income fell to 30.2 billion yuan in the fourth quarter from 46.2 billion yuan in the third quarter, according to calculations based on the lender's full-year and third quarter reports.

Its non-performing loan balance rose 6.3 billion yuan from the third quarter to 70.9 billion at the year's end, while NPL shed 0.07 percentage point to 1.09 percent.

Yan Qingmin, assistant chairman of the China Banking Regulatory Commission, said Chinese banks saw an increase in NPLs in the fourth quarter in general due to exposure to credit risk in an economic downturn.

In its latest report Guosen Securities predicted that the banks will see rising NPLs this year due to an economic downturn and the CBRC's stricter definition of a more accurate classification of loans.

"As the economy is clearly cooling and credit policy tightened, the credit demand has dropped in the first quarter and growth in new loans fell significantly. But we still see a healthy growth in the business in the medium- to long-run," the broker said.

The bank's A-shares have rebounded 4.7 percent so far since January.