China Construction Bank (CCB), the country's second largest lender, would strictly control its overseas operation risks and diversify assets in the future after exposing US$1 billion to Dubai World debt, a senior executive said Friday.

CCB vice president Fan Yifei told Xinhua that the bank would give priority to developing overseas business closely related to domestic operations while gradually putting risk management of overseas branches under a uniform risk control system.

Fan said the bank would strictly control its overseas branches' bond and loan investments to reduce non-preforming loans.

The lender will focus on funding domestic enterprises to operate overseas and facilitating trade exchanges, he added.

CCB share price dipped 0.35 percent to close at 5.69 yuan in Shanghai Stock Exchange Friday.

CCB disclosed Sunday it had set aside provision for around 1 billion U.S. dollars of loan granted by its Hong Kong branch to Dubai World.

When Dubai World announced debt restructuring last November, the loans granted by the CCB's Hong Kong branch were categorized as non-performing.

Dubai said that it would spend up to 9.5 billion U.S. dollars to restructure the debt-laden Dubai World conglomerate in a plan that would pay back bank lenders in 5-8 years.

CCB's non-performing loan ratio dropped to 1.50 percent in 2009, down 0.71 percent from the end of the previous year. The lender raised its allowances to non-performing loan ratio to 175.77 percent, or an increase of 44.19 percentage points from the previous year-end.

One of the largest commercial banks in China, CCB has opened 60 overseas operating outlets, including seven branches in Hong Kong, Singapore, Frankfurt, Johannesburg, Tokyo, Seoul and New York.

Fan said CCB was now studying the feasibility of setting up branches in regional financial hubs and merging markets like Southeast Asia, the Middle East and Latin America.

CCB reported in its annual result announcement Sunday that its net loans and advances to customers were 4.692947 trillion yuan (US$687.11 billion), up 27.4 percent from the previous year-end, while its net profit rose 15.32 percent to 106.84 billion yuan.