China Merchants Bank (3968) investor relations material

Executive summary

• Net operating income rose 3.85% year-over-year to RMB86.95 billion; net profit attributable to shareholders increased 1.52% to RMB37.85 billion for Q1 2026.

• Total assets grew 3.17% from year-end 2025 to RMB13.48 trillion; total loans and advances increased 2.84%.

• Asset quality remained stable with a non-performing loan (NPL) ratio of 0.94%, unchanged from year-end.

• Allowance coverage ratio decreased to 387.76%, and allowance-to-loan ratio to 3.63%.

Financial highlights

• Net interest income up 4.99% year-over-year to RMB55.64 billion; net non-interest income up 1.87% to RMB31.31 billion.

• Net interest margin declined 8 bps year-over-year to 1.83%; net interest spread down 5 bps to 1.77%.

• Operating expenses increased 2.91% to RMB27.43 billion; cost-to-income ratio improved by 0.19 percentage points to 28.46%.

• Expected credit losses rose 15.65% year-over-year to RMB14.85 billion.

• Net cash generated from operating activities increased 32.44% year-over-year to RMB125.85 billion.

Outlook and guidance

• Plans to maintain asset quality through proactive risk management, focus on high-quality asset allocation, and strict classification and disposal of non-performing assets.

• Will continue to support real estate sector with a project-centric approach and closely monitor retail and credit card risks.