China Merchants Bank (3968) Q2 2025 earnings summary

Executive summary

• Net profit attributable to shareholders rose 0.25% year-on-year to RMB 74.93 billion, while net operating income was RMB 169.92 billion, down 1.73% year-on-year.

• Total assets increased 4.16% to RMB 12.66 trillion; loans and advances grew 3.31% to RMB 7.12 trillion.

• Asset quality remained stable with NPL ratio at 0.93%, down 0.02 percentage points from year-end.

• Retail finance contributed over 55% to both net operating income and profit; corporate loans grew 7.89% year-on-year.

• ROAA was 1.21% and ROAE 13.85%, both declining year-on-year.

Financial highlights

• Net interest income rose 1.57% year-on-year to RMB 106.09 billion; net non-interest income fell 6.77% to RMB 63.84 billion.

• Cost-to-income ratio was 30.11%, up 0.36 percentage points year-on-year.

• Allowance coverage ratio was 410.93%; allowance-to-loan ratio was 3.83%.

• Core Tier 1 capital adequacy ratio was 14.00%; Tier 1 at 17.07%; total capital adequacy at 18.56%.

• Net interest margin was 1.88%, down 12 bps year-on-year.

Outlook and guidance

• Net interest margin is expected to remain under pressure in H2 2025 due to low interest rates and shift to time deposits.

• Focus on high-quality customer acquisition, asset origination, risk management, and digital/international transformation.

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

• Asset quality and NIM contraction expected to remain manageable with policy support and internal measures.