Only three banks' investment income in the first three quarters saw an increase among all listed banks in China, National Business Daily reported on Wednesday.

China Merchants Bank has made an investment income of more than one billion yuan ($149.8 million) in the first three quarters, up 21.3 percent year-on-year. Agricultural Bank of China, one of the Big Four banks in the country, has clinched 190 million yuan of investment income in the first three quarters, up 4.9 percent year-on-year. Industrial Bank, headquartered in Fuzhou, Fujian province, has yielded 508 million yuan, 30.3 percent higher than the same period last year.

In contrast, other 13 listed banks made less investment profit than a year before.

Bank of China, a State-designated foreign exchange and foreign trade bank, has yielded 3.9 billion yuan of investment income, 83 percent lower than the same period in 2009. China Citic Bank, whose profit had dropped about 163.4 percent, had only made 91 million yuan from January to September, the paper reported, citing the banks’ quarterly statements.

Sheng Hongqing, analyst at China Everbright Bank, said that investment channels for banks are very narrow now. “The major earnings come from bond trading and credit business transferring,” he said.

He said this year’s bond market is weaker than last year, so it’s normal if the investment income shrinks in 2010.

Shen also estimated that next year’s investment income growth rate will remain at a low level, because the possible interest rate hikes.

The rate increase will do good to widen net interest margin; however, it also has impacts on bond spreads. Thus, the banks’ investment income will be weakened, the newspaper reported citing a banking analyst.