Chinese banks, whose profits accounted for almost a third of the global banking industry last year, have reported slowing growth in the first half of this year in tandem with the nation's easing economy and accelerating financial reforms, according to their interim earnings reports.

First-half net profit of the Industrial and Commercial Bank of China grew 12.5 percent on an annual basis to 123.2 billion yuan (US$19.4 billion), the world's largest lender by market value said yesterday in a report prepared under international accounting rules.

ICBC's growth weakened from 29 percent in the same period of last year amid a complex and volatile external business environment, it said.

Its non-performing loan ratio, a rate that measures the proportion of bad loans over all loans, improved by 0.05 percentage point to 0.89 percent in the first half.

The Bank of Communications, the country's fifth-biggest lender by assets, also saw growth in profit slow to 17.8 percent in the first six months from 29.1 percent in the first half of last year, according to its earnings report released yesterday.

However, profit at BoCom's overseas businesses grew strongly by 46 percent. Its offshore assets jumped 76.7 percent in the first half to US$11.4 billion, and ranked top among all Chinese banks.

Its bad loan proportion improved by 0.04 percentage point to 0.82 percent in the first half from six months ago.

In an outlook report yesterday, Moody's said: "Credit tightening in the real estate sector and a slowdown of land-sale revenue for local governments will further erode banks' asset quality. The deterioration trend is just beginning."

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