(Yicai Global) Aug. 23 -- Postal Savings Bank of China, which has fulfilled 70 percent of its 2022 loan quota, boosted its revenue and net profit in the first half by issuing more credit.

PSBC's net profit rose by 15 percent to CNY47.1 billion (USD6.9 billion) in the first six months of this year from a year ago, the Beijing-based commercial bank said in its earnings report today. Revenue moved up 10 percent to CNY173.6 billion (USD25.3 billion).

Income from service charges and commissions rose rapidly, making up 10 percent of all revenue, up nearly 3.1 percentage points from a year earlier.

Going forward, the bank will make greater efforts to adjust its loan structure and cut the cost of debt, said Liu Jianjun, president. Meanwhile, the lender aims to raise its share of current deposits in all deposits. Moreover, it will reduce the scale of mid and long-term deposits while cutting interest rates.

In China, the demand for credit has decreased this year, causing pressures in the banking sector. PSBC took effective actions in response to the challenges, Liu said.

The lender issued more loans with competitive advantages, and maintained its risk-based pricing at a proper level, Liu said. It made sustained efforts to cut borrowing costs, especially those of three and five-year deposits, and thus eased the impact of lower loan interest rates on its interest rate spread, he added.

The efforts were bearing fruit. Loans grew by CNY537 billion in the first half, the biggest growth in the same period in history. Its loan-to-deposit ratio, a measure of liquidity, climbed by 0.8 percentage points from Dec. 31, 2021. The proportion of credit assets rose by 0.8 percentage points. The increase in the bank’s loans to the real economy made up 86 percent of the total growth of loans.

The lender touched on the heated topic of mortgages in the report. The PSBC had a personal mortgage loan balance of CNY2.2 trillion (USD320.7 billion) as of June 30. It had overdue loans of CNY127 million (USD18.5 million) caused by suspended housing projects, according to its earlier announcement.

The PSBC had CNY109.1 billion of loans issued to the real estate sector as of June 30, making up 1.6 percent of the total loan balance. More than half of the property loans have land or projects under construction as collateral, and the majority of the rest are guaranteed loans.

The rising gains failed to spur an equity price hike. PSBC's stock price [SHA: 601658] fell 2.4 percent to close at CNY4.40 (60 US cents). The shares have declined by almost 15 percent this year.

Editors: Shi Yi, Emmi Laine, Xiao Yi