* ICBC, BoCom, CCB post healthy H1 profit growth * Three banks log slight fall in NPL ratio * Net interest margins remain fairly steady (Adds CCB, context) SHANGHAI/BEIJING, Aug 27 (Reuters) - Three of China’s largest banks posted more than 9% first-half net profit growth on Friday as bad loans fell in a sign that the lenders are recovering from the COVID-induced hit they took last year. The results are a far cry from those of last year when the country’s top lenders reported their biggest profit falls in at least a decade at the end of the first half. They compare with a 4-5% rise in net profit reported by the three banks in the same period in 2019 before the pandemic hit. The zero tolerance approach to COVID-19 means China has been able to maintain a relatively high level of commercial activity, even as repeated lockdowns grip other parts of the world. As a result, China’s largest banks saw easing risks of bad loans and less pressure from regulators urging banks to lower commercial interest rates to businesses as they did last year during the height of the pandemic. Industrial and Commercial Bank of China (ICBC) , the world’s largest commercial lender by assets, said its net profit rose 9.87% in the first half of 2021 from the same period last year in a statement to the Hong Kong Stock Exchange on Friday. Following suit, China’s Bank of Communications Co Ltd (BoCom), the country’s sixth-largest lender by assets, posted a 15.1% increase in first-half net profit. Also on Friday, China Construction Bank Corp (CCB) , the country’s second-largest lender by assets, posted a 11.39% rise in first-half profit. All three lenders reported a slight fall in non-performing loan (NPL) ratios, with ICBC saying its NPL ratio dipped to 1.54% at the end of June from 1.58% at the end of the first quarter. BoCom reported a 1.6% NPL ratio at the end of the first half, compared to 1.64% at the end of the previous quarter, while CCB’s fell to 1.53% from 1.56% over the same period. Chinese commercial banks overall posted a 11.1% increase in first-half net profit to 1.1 trillion yuan, according to data from the China Banking and Insurance Regulatory Commission (CBIRC). By the end of the second quarter, the average non-performing loan ratio for commercial banks was at 1.76%, the CBIRC data showed, falling for the third consecutive quarter. BoCom said its net interest margin - a key indicator of bank profitability - inched up to 1.55% at the end of June, from 1.54% at the end of March, while ICBC saw a slight fall to 2.12% from 2.14% over the same period. CCB’s NIM remained steady from the end of March to end-June at 2.13%. UNCERTAIN TIMES Analysts and bankers cautioned that the current lack of global stability could impact how China’s banks fare in the second-half. “The unsynchronized pandemic prevention and control in the world, uneven economic recovery, increased expectations in monetary policy reorientation in major global economies,” will all impact China’s banking sector, said ICBC in its annual report. Analysts also highlighted the impact that domestic regulation could have on credit. In an August note, Morgan Stanley said credit growth could weaken more in the second half with policy tightening on 80% of credit demand in China, including property-related loan demand. “The original assumption of robust recovery from COVID may need to be reviewed given the macro situation,” said Moody’s banks analyst and vice president Nicholas Zhu. Banks “will need to be nimble and adaptive in the second half of the year”. $1 = 6.4791 Chinese yuan renminbi Reporting by Zhang Yan, Cheng Leng and Engen Tham; Editing by Kirsten Donovan, Kim Coghill and Emelia Sithole-Matarise Our Standards: The Thomson Reuters Trust Principles.