China Construction Bank (0939.HKG), the world’s second-largest lender by market value, saw its net profit increase 24% to RMB30.2 billion (US$4.8 billion) in the fourth quarter as a liquidity shortage on the mainland drove up interest rates, Bloomberg reported. The bank’s total loans expanded by RMB827 billion in 2011 to RMB6.5 trillion in the fourth quarter, while its net interest margin grew to 2.7% from 2.5% one year prior. Non-performing loans increased by RMB6.3 billion in the fourth quarter to RMB70.9 billion, accounting for 1.09% of Construction Bank’s portfolio. The bank set aside RMB15 billion to guard against bad debt in the quarter, down 10% from the previous year. Regulators have relaxed the required reserve ratio at Chinese banks twice since the beginning of December and scrapped bill sells to help ease a liquidity shortage in the mainland. Chinese banks gave out RMB7.47 trillion in new loans last year, down 6% from the total in 2010.