China Merchants Bank Posts 2.38% Net Profit Growth in First Three Quarters: NIM Stabilizes, AUM Approaches RMB 19 Trillion
nashnova research
China Merchants Bank (CMB) earned RMB 116.5 billion in net profit over the first three quarters, up 2.38% year-on-year, as its net interest margin stopped falling ahead of peers and retail AUM approached RMB 19 trillion — signalling that China's leading retail bank is repairing fundamentals on two fronts at once.
Why did CMB's margin stop falling before everyone else's?
Net interest spread hit 1.76% and NIM 1.82% for the first nine months. In Q3 alone, both held flat versus Q2 — the first bank in the sector to arrest the decline.
This means → while peers' margins are still compressing, CMB has found a floor at least one quarter ahead.
Funding costs fell to an annualised 1.04%; demand deposits made up 49.75% of all deposits — nearly half its deposit base costs almost nothing.
In plain terms = CMB keeps funding costs ultra-low because customers willingly park money in current accounts, and that cushion absorbs the pressure from falling lending rates.
AUM near RMB 19 trillion — where is the money coming from?
Retail AUM reached RMB 18.71 trillion, up roughly RMB 1.62 trillion or 9.52% from year-end; total retail customers stood at 236 million.
"Sunflower" tier and above (high-net-worth) clients hit 6.50 million, up 9.63% YoY; private-banking clients neared 220,000, up 10.10%.
This means → the incremental money is coming mainly from affluent and high-net-worth clients — a sticky, high-contribution segment that is the core engine behind AUM expansion.
Wealth-management fees surging — how well are funds selling?
Non-interest income totalled RMB 95.5 billion, up 4.48% YoY; within that, wealth-management fee and commission income reached RMB 23.5 billion, up 13.71%.
Agency fund income jumped 31.63% YoY; agency trust-plan income rose 32.27% — both far outpacing the headline growth rate.
This reflects a rebound in equity-fund demand. CMB's massive client base and distribution reach let it capture the largest share of the fund-sales recovery.
Property NPL ratio drops sharply — how far along is the clean-up?
Overall NPL ratio held at 0.94%, flat from year-end; provision coverage stood at 389.39%, meaning nearly RMB 3.9 in reserves backs every RMB 1 of bad loans.
Real-estate NPL ratio fell to 3.89%, down 0.75 percentage points from year-end; more than 85% of property-development loans sit in Tier-1 and Tier-2 cities.
In plain terms = CMB's property risk is clearing faster precisely because it lent mostly to top-tier city projects — those projects generate stronger repayments, so the bad-loan pile shrinks quicker.
What to watch next?
Whether NIM holds steady through Q4 is the first test of how real this fundamental repair is.
Whether AUM growth can sustain a roughly 10% pace depends on capital-market performance and the ongoing migration of client funds.
This means → CMB's narrative has shifted from "still deteriorating" to "starting to stabilise," but confirming the move from "stable" to "growing again" will take at least one to two more quarters of data.
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