China Merchants Bank (600036) Commentary Report: Fourth Quarter Interest Spreads Continue to Rise

China Merchants Bank (600036) Commentary Report: Fourth Quarter Interest Spreads Continue to Rise

Event: On March 23, 2019, China Merchants Bank announced its 2018 annual results.

Key points of investment: Profit before provision increases by 11 per year.

1%, and the expected growth of risk assets is 15 per year.

9%: Achieved operating income of 2466 by 2018.

$ 8.9 billion, an increase of 12 per year.

4%, the profit before 杭州夜网论坛 provision was 1673.

34 trillion US dollars, an annual increase of 11.

1%, realizing net profit attributable to mother 805.

60,000 yuan, an annual increase of 14.


The balance of deposits increased by 8 from the beginning of the year.

9%, loan budget increased by 10 compared with the beginning of the year.

6%, and the risk assets are expected to grow by 15 per year.


Net interest margin continued to rise in the fourth quarter of 2018: From a statistical point of view, the increase in single quarter net interest margin in the fourth quarter mainly benefited from the rise in loan yields and the increase in the proportion of retail loans.

The average retail loan yield growth rate increased by 10 BP compared to mid-2018.

The proportion of loans in total assets continued to rise 0.

7 supplements: From the perspective of the structure of the previous supplementary loans, public supplements accounted for 29% and retail supplements accounted for 61%.

The main industries for public supplementation are real estate and delivery, which are replenished 25 respectively.

6% and 24.

8%; the increase in retail loans is mainly concentrated in mortgage and credit card loans.

On the debt side, the proportion of demand deposits has remained above 65%. From the perspective of the added structure of deposits, it mainly comes from corporate retail deposits and personal time deposits.

Looking at the data from the previous month, the proportion of personal deposits continues to increase.

The short-term growth rate of measure fees dropped: from a structural point of view, it represents a relatively high commission income replacement for custody and trust business.

5%, mainly affected by the new rules on asset management and the decline in social financing needs, and the high-yield assets on the wealth management investment side have also decreased accordingly.

Other net income increased by 80% annually, mainly benefiting from the high increase in investment income.

The non-performing ratio of retail loans increased slightly by 2BP compared to the primary level: the non-performing ratio of retail mortgages increased slightly by 1BP, slightly by 4BP, and consumer loans increased by 16BP.

As for public affairs, the NPL ratio of traditional low-risk industries, which have been supplemented in the past three years, has increased slightly. It is necessary to continue to track the trend of NPL ratio in these industries.

Technological expansion continued to grow, with operating business and management fees increasing15.

5%, the cost-income ratio rose by 0.

93 Groups: The Group strongly supports fintech innovation and increases investment in IT infrastructure construction and R & D personnel.

In addition, it has increased resources investment in online customer acquisition and operation.

Profit forecast and investment advice: The company’s operations are stable, and 杭州桑拿网 technology investment is increasing.

The retail business NPL ratio fluctuated slightly, and the overall asset quality remained stable.

The company currently expects a corresponding PB estimate for 2019-2020 of 1.

43 times, 1.

27 times, maintaining the “overweight” level.

Risk factors: The economic recession is better than expected; the market decline presents systemic risks.

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