Detailed Analysis of China Merchants Bank 2025 Annual Report: Core Revenue Continues to Recover, Wealth Management Steadily Gains Momentum【Zhongtai Bank · Dai Zhifeng / Deng Meijun / Yang Chaolun】

Report Summary

Performance at the margin trends better, supported by net interest income and fee income. CMB 4Q25 revenue was -0.1% year over year (3Q25 YoY: -0.7%). The revenue decline narrowed; net profit was +1.2% YoY (3Q25 YoY: +0.5%), with net profit growth trending up at the margin. Net interest income was +2.0% YoY (3Q25 YoY: +1.7%), maintaining a rebound trend. Net non-interest income was -3.9% YoY (3Q25 YoY: -4.8%); the decline narrowed. Other non-interest items remained under pressure, but fee income growth accelerated and rebounded. Full-year cumulative YoY was +4.4% (3Q25 cumulative YoY: +0.9%).

Net interest income was +2.0% YoY and +3.0% quarter over quarter. Single-quarter annualized net interest margin increased by 3bp QoQ to 1.86%, with overall support from the liability side remaining intact. Single-quarter annualized yield on interest-earning assets decreased by 5bp QoQ to 2.92%. Single-quarter annualized cost of interest-bearing liabilities fell by 9bp QoQ to 1.13%.

Asset and liability growth and structure: Loans and deposits grow steadily. (1) Asset side (single-quarter average): 4Q25 interest-earning assets were +6.7% YoY (3Q25 YoY: +9.4%); total loans were +4.3% YoY (3Q25 YoY: +5.2%); bond investments were +15.9% YoY (3Q25 YoY: +19.1%). (2) Liability side: interest-bearing liabilities increased 7.6% YoY; total deposits increased 7.7% YoY. Deposit growth exceeds loan growth.

As of 4Q25, details of industry credit growth (parent-bank basis): Corporate banking maintained relatively high growth; all categories of retail assets other than credit cards achieved positive growth. (1) Corporate: corporate loans were +13.1% YoY; “quasi-government信类” (泛政信) assets, manufacturing, wholesale & retail, and information & computing industries were +12.4%, +14.4%, +23.8%, and +33.1% YoY, respectively; the deleveraging in real estate eased, down -1.1% YoY. (2) Retail: retail loans were +2.1% YoY; mortgages, credit cards, consumer loans, and small & micro loans were +0.5%, -0.9%, 7.1%%, and +6.0% YoY, respectively.

As of 4Q25, details of industry loan increment (parent-bank basis): “Quasi-government信” (泛政信), manufacturing, and wholesale & retail take the top three by share. The incremental shares of corporate, retail, and bills were 95:20:-16. The top five industries by incremental deployment share were “quasi-government信” (39.7%), manufacturing (22.7%), wholesale & retail (14%), personal business loans (13.6%), and information & computing (11.7%).

As of 4Q25, deposit growth and structure (group basis): Corporate demand deposits and individual demand deposits increased by +7.2% and +6.6% QoQ, respectively. In 4Q25, demand deposit share was 50.8%, up 1.7 percentage points QoQ. Within that, individual demand deposit share and corporate demand deposit share both increased QoQ.

Other non-interest items’ decline continued to narrow, and fee income improved noticeably. Net non-interest income was -3.9% YoY (3Q25 YoY: -4.8%). Of which: (1) Net fee income was +4.4% YoY (vs 3Q25 YoY: +0.9%); growth accelerated significantly. Of which: wealth management fee income was +21.4% YoY (vs 3Q25 YoY: +18.7%), with further improvement in growth. Specifically: asset management agency funds were +40.4% YoY, maintaining high growth; insurance agency was -9.4%; wealth management products agency was +19.0%; trust agency was +65.6%, maintaining high growth. (2) Cumulative net other non-interest income was -16.6% YoY (vs 3Q25 YoY: -14.1%), with the decline widening slightly.

Overall asset quality (group basis): Overall stable. The bad-debt formation rate is flat QoQ, and the delinquency ratio maintains a downward trend. 1) The non-performing loan (NPL) ratio was flat QoQ. In 4Q25, the NPL ratio was 0.94%, basically unchanged QoQ. Single-quarter annualized net NPL generation was 0.83%, up 1bp YoY. 2) Delinquency dimension—The delinquency ratio was 1.25%, down 4bp QoQ; among them, loans overdue for more than 3 months as a proportion of total loans decreased 5bp QoQ to 0.72%. Delinquency as a share of NPLs was 132.9%, down 3.36 percentage points QoQ. 3) Provision coverage ratio was 391.79%, down 14 percentage points QoQ, still staying at a high level. Loan loss reserve to loans was 3.68%, down slightly QoQ.

Asset quality across business lines (parent-bank basis): (1) Corporate improved: NPL ratio was up 2bp QoQ to 0.84%, a small fluctuation on a low base; the share of watchlist assets decreased 11bp QoQ to 0.69%; the delinquency ratio decreased 17bp QoQ to 0.77%. Among them, the balance of corporate real estate loans was 283.1 billion yuan, accounting for 4.1% of total corporate loans and advances, down 5bp QoQ. Corporate real estate NPL ratio was up 40bp QoQ to 4.64%, while down 10bp YoY. (2) Retail: NPL ratio was up 3bp QoQ to 1.08%, still low overall. NPL ratios for small & micro, mortgages, credit cards, and consumer loans changed by +11bp, +6bp, 0bp, and -15bp QoQ, respectively.

Based on the already released 2025 annual report, we accordingly adjust relevant assumptions and profit forecasts. We expect 26E-27E attributable net profit to be 153.2 billion and 156.6 billion yuan (previous values: 154.6 billion and 156.1 billion). The forecast for incremental 28E attributable net profit is 156.0 billion yuan.

Investment Recommendation: For the company, 2026E, 2027E, and 2028E PB is 0.84X/0.77X/0.70X; PE is 6.49X/6.35X/6.22X. In retail and wealth management, CMB has gradually built “a moat of business model”; it lies in the long-term formation of an internal market-oriented, external customer-oriented “corporate culture” (rare within the banking industry); it also lies in a large group of pragmatic, hardworking, professional, and enterprising upright mid-to-senior managers and core business backbones forming a “team of talent.” These underlying values have not changed; they still make CMB one of the industry’s scarce, excellent banks worth holding long term. Maintain a “Buy / Increase Holdings” rating.

Risk Warning: Economic downturn beyond expectations; the company’s operations not meeting expectations; the research report information not being updated in a timely manner.

Securities Research Report: Explaining the 2025 annual report of China Merchants Bank in detail: Core income continues to rebound; wealth management steps up steadily

Externally Released Date: March 29, 2026

Report Issuing Organization: Zhongtai Securities Research Institute

Participant Information:

Dai Zhifeng | SAC No.: S0740517030004 | Email: daizf@zts.com.cn

Deng Meijun | SAC No.: S0740519050002 | Email: dengmj@zts.com.cn

Yang Chaolun | SAC No.: S0740524090004 | Email: yangcl@zts.com.cn

Zhongtai Bank Team

Dai Zhifeng (Practicing certificate No.: S0740517030004) CFA. Head of the Zhongtai Financial Group; a special research fellow of the National Financial and Development Laboratory; ranked third among the Best Analysts in the New Fortune Banking Industry in 2020; second among the Best Analysts in the New Fortune Banking Industry in 2018-2019; second among the Best Analysts in the Crystal Ball Banking Industry in 2019-2020; first among the Best Analysts in the Crystal Ball Banking Industry in 2018 (public fund); first among the most popular bank analysts in the insurance asset management sector in 2018. Previously worked at the People’s Bank of China, Haitong Securities, and Soochow Securities, among others. Has been selected as one of the Best Analysts in the New Fortune Banking Industry for five consecutive years. Director of Zhongtai Securities Research Institute.

Deng Meijun (Practicing certificate No.: S0740519050002) Banking industry analyst. Bachelor’s degree from Nankai University; Master’s degree from Shanghai Jiao Tong University. Joined Zhongtai Securities Research Institute in 2017.

Yang Chaolun (Practicing certificate No.: S0740524090004) Banking industry analyst. Master’s degree in Finance from University of California, San Diego. Previously worked for the headquarters of a commercial bank. Joined Zhongtai Securities in 2022.

Ma Zhihhao (Practicing certificate No.: S0740523110002) Banking industry analyst. Bachelor’s degree in Finance from Nankai University; Master’s degree in Finance from Nankai University. Previously worked at Northeast Securities. Joined Zhongtai Securities in 2023.

Chen Cheng (Practicing certificate No.: S0740525110001) Banking industry analyst. Bachelor’s degree from Fudan University; Master’s degree in Applied Economics from National University of Singapore. Previously worked at Northeast Securities. Joined Zhongtai Securities in 2025.

Liu Yu zhe (Practicing certificate No.: S0740125110011) Assistant banking industry analyst. Master’s degree in Applied and Econometric Economics from the University of Southern California. Joined Zhongtai Securities in 2025.

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