A China Construction Bank Corp branch in Beijing. The bank posted net income in 2011 of 169.3 billion yuan ($26.8 billion). [Nelson Ching / Bloomberg]

China Construction Bank Corp, the world's second-largest lender by market value, posted a 24 percent increase in fourth-quarter profit after higher lending and fee income outweighed provisions set aside for bad debt.

Net income climbed to 30.2 billion yuan ($4.8 billion) in the quarter, from 24.4 billion yuan, according to calculations based on full-year figures published by the Beijing-based lender on Sunday.

CCB posted a 26 percent increase in net income in 2011 to 169.3 billion yuan, according to the statement.

Net interest income rose 21 percent to 304.6 billion yuan in 2011. Fee income from services such as credit cards and trade finance advanced 32 percent to 87 billion yuan.

CCB joins smaller rival China Minsheng Banking Corp in posting higher earnings after a credit shortage drove up interest rates, boosting loan profitability.

Still, curbs on borrowing by local governments, property developers and homebuyers are triggering bad debts as the lender has more assets at risk from these clients than most of its peers.

"We forecast earnings growth will slow from the very robust 25 percent in 2011 to 10 percent in 2012 as credit costs rise, loan growth decelerates and net interest margins contract in the second half," Mike Werner, a Hong Kong-based analyst at Sanford C. Bernstein & Co, said in a research report on Monday.

Chinese lenders advanced 7.47 trillion yuan of new loans last year, 6 percent less than the amount offered in 2010. That helped boost weighted-average lending rates to 8.01 percent in December, up 1.82 percentage points from the beginning of the year, according to the central bank.

CCB made 827 billion yuan of new loans in 2011, taking the total to 6.5 trillion yuan. Its net interest margin widened to 2.7 percent from 2.5 percent a year earlier, according to the company's statement on Sunday.

China relaxed lenders' reserve requirements twice since the start of December and scrapped bill sales this year to ease a cash crunch that was stifling growth in the world's second-biggest economy.

Gross domestic product expanded 8.9 percent in the fourth quarter, or at the slowest pace in more than two years.

CCB's non-performing loans rose 6.3 billion yuan in the fourth quarter to 70.9 billion yuan on Dec 31, accounting for 1.09 percent of the portfolio. The bank set aside 15 billion yuan against soured debt during the period, 10 percent less than a year earlier.

"For years there are lots of international worries on what's going on in China, yet China comes out fine," said Frank Newman, former chairman of Shenzhen Development Bank Co on March 23. "The government does not want to have a big banking problem this year or next year, and there are a lot of things they can do in terms of extending loans, rearranging government financing."

China is trying to spur credit to smaller companies while limiting home loans that could create a property bubble. In a speech in Beijing on March 5, Premier Wen Jiabao said the government will "strictly implement" restrictions.