Quarterly net profit resumed positive growth, China Merchants Bank's third-quarter performance showed improvement "dawn"

The "valuation ceiling" of the entire banking sector, China Merchants Bank, released its third-quarter report on the evening of the 29th.

According to the third-quarter report disclosed by China Merchants Bank, from January to September 2024, China Merchants Bank achieved operating income of 252.709 billion yuan, a slight decrease of 2.91% year-on-year; achieved a net profit attributable to shareholders of 113.184 billion yuan, a slight decrease of 0.62% year-on-year, with both declines significantly improving compared to the interim report.

In addition, looking at the performance for a single quarter, China Merchants Bank's net profit attributable to shareholders for the quarter increased by 0.79%.

Net Interest Income Accounts for 62%

China Merchants Bank's third-quarter report shows that the net interest income of China Merchants Bank from January to September this year was 157.298 billion yuan, accounting for 62.24% of operating income, a decrease of 3.07% year-on-year.

During the same period, China Merchants Bank's net interest margin was 1.87%, and the net interest yield was 1.99%, both decreasing by 20 basis points year-on-year. The quarterly report shows that the year-on-year decline in the yield of new credit business led to a decrease in asset yield, which was the main factor lowering the net interest income yield. At the same time, the continued impact of factors such as the marketization of deposit interest rates led to a year-on-year decrease in the cost of interest-bearing liabilities, which had a certain positive effect on the net interest income yield.

Significant Increase in Other Net Income

The quarterly report also shows that from January to September 2024, China Merchants Bank achieved non-interest net income of 95.411 billion yuan, accounting for 37.76% of operating income, a decrease of 2.63% year-on-year, with relatively less impact.

It is reported that the year-on-year decrease in China Merchants Bank's non-interest net income was mainly due to the combined effect of fee reductions on some products and the weak investment willingness of customers, leading to a decrease in fee and commission income.

However, China Merchants Bank's other net income was 39.709 billion yuan, a year-on-year increase of 28.23%, mainly due to increased income from bond and fund investments.

Annualized ROAE Still Above 15%

The third-quarter report also shows that in the first three quarters of this year, China Merchants Bank's annualized return on average total assets (ROAA) and annualized return on average common equity (ROAE) were 1.33% and 15.38% respectively, with the net asset return rate still above 15% (annualized).

Non-performing Loan Ratio Declined

The third-quarter report also shows that as of the end of the reporting period, China Merchants Bank's total assets exceeded 11.65 trillion yuan, an increase of 5.68% from the end of the previous year; total loans and advances were nearly 6.76 trillion yuan, an increase of 3.84% from the end of the previous year; total liabilities were nearly 10.5 trillion yuan, an increase of 5.56% from the end of the previous year; and total customer deposits exceeded 8.73 trillion yuan, an increase of 7.08% from the end of the previous year At the end of the reporting period, China Merchants Bank's non-performing loan balance was 63.557 billion yuan, an increase of 1.978 billion yuan from the end of the previous year; the non-performing loan ratio was 0.94%, a decrease of 0.01 percentage points from the end of the previous year; the provision coverage ratio was 432.15%, a decrease of 5.55 percentage points from the end of the previous year; and the loan loss reserve ratio was 4.06%, a decrease of 0.08 percentage points from the end of the previous year