Bank of China Ltd, the nation's fourth-largest lender by assets, posted a better-than-expected 17 percent increase in third-quarter profit as its lending margin improved.

Net income climbed to 34.8 billion yuan ($5.6 billion), from 29.8 billion yuan a year earlier, according to a statement from the bank on Thursday. That exceeded the 32.7 billion-yuan median estimate of 10 analysts surveyed by Bloomberg News.

Profit growth accelerated from 5.3 percent in the previous three months, the weakest quarterly increase in three years, after the slowing economy cooled credit demand. The lender may struggle to maintain earnings momentum as a continued slowdown pushes borrowers to default, while deregulation of interest rates squeezes lending margins.

China Daily-Agencies