Bank of China (3988.HK) reported a 28% increase in first-half profits, along with a 0.1% decrease in non-performing loans (NPLs), Bloomberg reported. The nation’s third-largest lender earned US$10.4 billion in net income, in line with analysts’ estimates. Nevertheless, the stock is down 27% this year on fears that the bank’s relatively rapid growth relative to its competitors might imply a higher ratio of risky loans. BoC lending increased 72% between 2008 and 2010, much higher than the 49% growth of rivals Industrial & Commercial Bank of China (ICBC; 1398.HK) and China Construction Bank (0939.HK). In compliance with new government regulations, BoC has increased its provisioning coverage ratio against NPLs to 217.3%, setting aside an additional US$2 billion in the first half of 2011. The bank reported US$83.15 billion in outstanding loans to local governments, with a bad debt ratio of 0.17%.