China Merchants Bank (3968) Q4 2024 earnings summary

Executive summary

• Achieved steady operational performance in 2024 despite a complex external environment, with positive net profit growth, high ROA/ROE, and stable asset growth.

• Maintained strong asset quality with a non-performing loan (NPL) ratio of 0.95% and allowance coverage ratio of 411.98%.

• Accelerated digital and intelligent transformation, with significant investment in AI and technology.

• Enhanced ESG integration, green finance, and internationalization efforts, with MSCI ESG rating upgraded to AAA.

• Retail customer base exceeded 200 million, with retail AUM approaching RMB15 trillion.

Financial highlights

• Net operating income: RMB339.08 billion, up 0.58% year-over-year; net profit attributable to shareholders: RMB148.39 billion, up 1.22% year-over-year.

• Net interest income: RMB211.28 billion, down 1.58% year-over-year; net non-interest income: RMB125.84 billion, up 1.15%.

• Cost-to-income ratio: 31.92%, down 1.05 percentage points.

• Total assets exceeded RMB12 trillion, up over 10%; customer deposits exceeded RMB9 trillion, up over 10%.

• Basic and diluted EPS were RMB5.66, up 0.53% year-over-year.

Outlook and guidance

• Expects continued NIM contraction in 2025, but aims to outperform peers; net interest margin expected to remain under pressure due to low market rates.

• Loan growth target for 2025 set at approximately 7.8%, with focus on stable, high-quality asset origination.

• Strategic focus on wealth management, fintech, risk management, and international expansion to drive value creation.

• Plans to maintain stable dividend payout ratio above 35%.

• Focus on expanding technology finance, green finance, inclusive finance, retirement finance, and digital finance.