China Merchants Bank (3968) Q4 2025 earnings summary

Executive summary

• Achieved dual growth in revenue and net profit for 2025, with net operating income at RMB 337.273 billion (up 0.05%) and net profit attributable to shareholders at RMB 150.2 billion (up 1.21%), both reaching record highs despite a challenging macroeconomic environment.

• Maintained industry-leading ROAA (1.19%) and ROAE (13.44%), despite slight year-on-year declines.

• Retail customer base exceeded 224 million, with retail AUM surpassing RMB 17 trillion (up 14.44%).

• Continued strategic transformation, with significant improvements in digitalization, risk management, and international operations.

• MSCI ESG rating remained at AAA for two consecutive years, reflecting strong ESG performance.

Financial highlights

• Net interest income rose 2.04% to RMB 215.6 billion; NIM was 1.87%, down 11bps year-on-year but with a narrower reduction.

• Non-interest income fell 3.31% to RMB 21.7 billion, but net fee and commission income grew 4.39%, first positive growth since 2022.

• Total assets surpassed RMB 13 trillion, up 7.56%; total loans and advances reached RMB 7.26 trillion (up 5.37%), and customer deposits RMB 9.84 trillion (up 8.13%).

• Basic EPS: RMB 5.70, up 0.71% year-on-year.

• Cost-to-income ratio at 32.01%, up 0.09 percentage points year-on-year.

Outlook and guidance

• Expects continued pressure on NIM and profitability in 2026 due to low interest rates, weak demand, and policy-driven fee reductions.

• Targeting 6–7% growth in both total deposits and total loans for 2026.

• Will focus on value creation, digital transformation, risk management, and balanced development across four major business segments.

• Continued focus on technology finance, green finance, inclusive finance, retirement finance, and digital finance.

• ROE expected to remain under pressure but targeted to stay above 10% as a bottom.