BEIJING - ?Bank of China (BOC), the nation's third-largest lender by assets, said on Thursday that its net profit in 2011 gained 18.93 year-on-year to reach 130.32 billion yuan ($20.7 billion) due to higher net income margins and fee income.

Net interest income, or revenue from borrowers minus interest paid to depositors, rose 17.58 percent from the previous year to 228.06 billion yuan in 2011, according to the annual report BOC filed with the Shanghai Stock Exchange.

Commissions and income from services fees was another major contributor to the bank's profit growth, with a year-on-year increase of 21.41 percent to reach 100.23 billion yuan.

The capital adequacy ratio of the bank stood at 12.97 percent at the end of last year.

Non-performing loans outstanding dropped by 570 million yuan to 63.31billion yuan at the end of 2011, with the non-performing loan ratio falling 0.13 percentage points from previous year to 1 percent.

The Board of Directors proposed a pre-tax year-end cash dividend of 0.155 yuan per share, which is subject to shareholders' approval.

BOC's net profit of 130.32 last year was compared to 208.4 billion yuan for Industrial and Commercial Bank of China and 169.4 billion yuan for China Construction Bank, as well as 50.74 billion yuan for Bank of Communications and 36.13 billion yuan for China Merchants Bank.