(Yicai Global) Aug. 18 -- China's Ping An Bank reported slowing net profit growth in the first six months of this year despite its quadrupled foreign exchange gains amid its moves to dispose of bad loans.

Net profit rose almost 26 percent to CNY22.1 billion (USD3.3 billion) in the first half from a year ago, the Shenzhen-based joint-stock commercial lender said in its earnings report yesterday. However, a year earlier, its profit growth had been nearly 29 percent.

From January to June, Ping An Bank's revenue climbed 9 percent to CNY92 billion. Its total assets reached CNY5.1 trillion (USD750 billion) as of June 30, up nearly 4 percent from Dec. 31, 2021.

The lender tied to a major Chinese insurer has made progress in improving its financial health. It recovered non-performing assets, increased its investment and foreign exchange gains, and boosted its interest income.

In the first half, the bank recovered CNY26.7 billion of non-performing loans, an increase of 35 percent from a year ago. The sum equals more than four-fifths of that of 2021.

Assets were generating gains. Net interest income, including returns from loans, mortgages, and securities, rose 8 percent in the first half, accelerating the pace of rising. The move was mainly caused by two factors. Ping An Bank's exchange gains more than quadrupled to CNY2.2 billion (USD323.9 million) while its investment income surged by 30 percent. Meanwhile, net non-interest income, which includes collected service charges, jumped 10 percent to CNY28 billion.

Asset quality remained stable. By the end of June, the bank's NPL balance was CNY32.8 billion, up about CNY1.5 billion from a year earlier. The NPL ratio was 1.02 percent, unchanged from Dec. 31, 2021.

The report touched on the heated topic of mortgage repayments. Online rumors claimed that Ping An Bank is involved in 27 projects among the nation's over 300 housing projects that have stalled and resulted in buyers' refusal to repay their home loans.

Ping An Bank's balance of overdue mortgages regarding these properties is CNY78 million (USD11.5 million), accounting for 0.03 percent of the bank's total home loan balance, the lender said. The sum makes up almost 8.8 percent of all loans as of July 31.

The bank's mortgage balance was CNY282.9 billion (USD41.6 billion) as of June 30, and the resulting NPL ratio was 0.18 percent. Meanwhile, in the real estate sector, Ping An Bank's NPL ratio was 0.77, up 0.55 percentage points from Dec. 31.

Investors were not overly excited about the results. Ping An Bank's stock price [SHE: 000001] fell as much as 1.9 percent to CNY12.16 (USD1.80) intraday as of 2.57 p.m.

Editors: Shi Yi, Emmi Laine, Xiao Yi