Bank of China (BOC), the country's third largest lender by market value, saw a 59 percent drop in its fourth quarter net profit last year due to narrowing net interest margins and rising loan impairments, the lender's 2008 earnings report released yesterday showed.

The bank's net interest margin dipped 13 basis points to 2.63 percent in 2008, down from 2.76 percent in the previous year. A basis point is 0.01 percentage point. BOC recorded 4.42 billion yuan in net profit in the fourth quarter of 2008, down from 10.77 billion yuan from a year ago period.

The government lifted annual lending quotas for Chinese banks last November and unveiled a 4-trillion-yuan economic stimulus package, triggering sharp lending growth in domestic banks.