Bank of China (BOC) said it had halved its investments to US subprime assets by the end of 2007 as it announced an annual net profit of US$7.99 billion, up 31% on the previous year, the Wall Street Journal reported. Despite a high exposure to subprime securities compared to most Asian financial institutions, BOC managed to reduce its holdings to US$4.99 billion from US$10 billion at the end of 2006. The bank has also set aside US$1.3 billion to cover potential losses. It is still unclear exactly how much BOC has lost on its subprime investments, and the bank is under no legal requirement to explain how it valued these assets. Industrial and Commercial Bank of China saw annual profits rise 65% to US$11.57 billion, largely thanks to higher interest income and growth in fee-based services. It set aside US$400 million to cover potential losses on its US$1.23 billion in subprime-related investments.