Depth-Company-China Merchants Bank (600036): Spread rises higher than expected Excellent fundamentals support leading premium

Depth * Company * China Merchants Bank (600036): Higher interest rate spread than expected Excellent fundamentals support leading premium

China Merchants Bank’s interest margin improved significantly in the fourth quarter, driving rapid revenue growth, and the annualized ROE further improved, leading it in the industry.

We believe that China Merchants Bank’s prudent and prudent operating style, the continuous consolidation of its advantages in the retail sector, and the gradual emergence of fintech promotion have turned into stronger risk defense capabilities in the downturn than its peers, and its profitability can remain outstanding, maintaining a buy rating.

Key points of support levels The improvement in interest margins has led to an increase in the growth rate of net net income. The middle income business has continued to adjust. China Merchants Bank ‘s 2018 net profit has increased by 14%.

84%, an increase of 0 compared with the first three quarters.

2 units, the growth rate is expected to be at the forefront of the shares.

The increase in the company’s net profit growth was mainly due to the marked improvement in interest margins, which led to a growth in net interest income growth of 0 compared with the first three quarters.

86 averages to 10.


However, there is still adjustment pressure in the middle income business, and fee income growth rate (3.

(85%, year-on-year) expected to drag down revenue performance, revenue growth rate fell by 1 compared with the previous three quarters.

05 averages to 12.


2019 is the transitional period for the transition of wealth management business. The adjustment of the company’s wealth management business will continue. Affected by this, fee income is expected to maintain low growth.

The interest rate rise was higher than expected. The outstanding performance of deposits in the fourth quarter was the highlight of China Merchants Bank’s interest rate performance, with a single quarter net interest margin of 2.

66%, an increase of 12BP month-on-month, mainly due to the increase in asset-side income brought by the optimization of the loan structure.

The company’s loan balance increased in the fourth quarter, but the proportion of retail sales increased to 51%. Especially the high-yield credit card business developed rapidly, and the loan balance increased.


The company’s single-quarter loan yield increased by 10BP QoQ to 5.

twenty three%.

On the debt side, CMB’s deposits increased by 8 in the fourth quarter.

94%, a further 74BP increase over the previous three quarters.

The cost ratio of deposits in the fourth quarter remained flat at 1.


Non-performing assets continued to decline. In terms of asset quality of upstream peers, CMB’s non-performing loan ratio in the fourth quarter fell by 6BP to 1 from the previous quarter.


We estimate that the company’s single quarterly annualization in the fourth quarter generated supplementary zero.

48%, down 12BP from the previous month, basically flat for ten years.

The company’s overdue loan / non-performing loan ratio over 90 days was 78.

9%, strict identification of non-performing; provision coverage ratio increased further by a minimum of 32 to 358% from the previous month, with adequate provisioning.

Taken 深圳桑拿网 together, China Merchants Bank is at the leading level in terms of asset quality and risk resistance.

It is estimated that taking into account the downward pressure on asset-side pricing and the company’s initiative to increase the provision of reserves under stable and changing economic conditions, we adjusted China Merchants Bank’s 2019/2020 net profit growth rate to 12.

9% / 11.

0% (was 13.

3% / 12.

3%), currently corresponding to the net subsidy of the city in 2019/2020 1.


27 times.
The main risks faced by the rating are: asset quality expectations exceed expectations, and financial supervision exceeds expectations.