BEIJING - Total custodial assets of China's banking industry surged last year as banks seek to expand the business and maintain profitability during the process of market-oriented interest rate reform.

As of the end of 2014, banking industry's custodial assets stood at 54.12 trillion yuan (about $8.8 trillion), up 54.7 percent from one year earlier, according to data released by the China Banking Association on Thursday.

Asset custody businesses have thrived in China over the past few years, with the expansion of banks' custodial assets registering more than 50 percent growth rates for three consecutive years, the association said in a report.

Chinese banks are developing intermediary businesses, such as asset custody services, to make a profit, rather than relying heavily on net interest margin, which is shrinking as interest rates are increasingly liberalized.

Banks' asset custody services include capital settlement, asset safekeeping and wealth management.

According to the report, domestic bank revenues from the asset custody businesses climbed 17.8 percent from one year earlier to 37.1 billion yuan last year.