China Merchants Bank (3968) Q2 2025 earnings summary

Executive summary

• Net profit attributable to shareholders rose 0.25% year-over-year to RMB 74.93 billion, with net operating income reported between RMB 169.92 billion and RMB 172.92 billion, reflecting both slight growth and contraction depending on reporting basis.

• Total assets increased 4.16% to RMB 12.66 trillion, with loans and advances up 3.31% and customer deposits up 3.58%.

• Asset quality remained stable with a non-performing loan (NPL) ratio of 0.93%, down 0.02 percentage points year-over-year.

• Retail business and subsidiaries contributed over 55% to both net operating income and profit, with retail AUM exceeding CNY 16 trillion and retail loans at 51.68% of total loans.

• Maintained industry-leading ROAA (1.21%) and ROAE (13.85%), though both declined from previous periods.

Financial highlights

• Net interest income rose 1.57% year-over-year to RMB 106.09 billion, while net non-interest income fell 6.77% to RMB 63.84 billion.

• Net interest margin contracted by 12 bps to 1.88%.

• Cost-to-income ratio ranged from 29.75% to 30.11%, with a slight year-over-year increase.

• Allowance coverage ratio at 410.93%, loan loss reserve ratio at 3.83%.

• Core Tier 1 capital adequacy ratio was 14.00%, with total capital adequacy at 18.56%.

Outlook and guidance

• Management expects steady progress in H2, aiming to meet annual budget goals despite ongoing NIM pressure and weak credit demand.

• Focus on cost control, asset quality, and growth in fee-based income, with continued emphasis on retail, digital, and internationalization strategies.

• Non-interest income recovery and further growth in green, technology, and inclusive finance are strategic priorities.