China Merchants Bank Q3 Profit Rises 3.06% to RMB40.031 Billion

China Merchants Bank (CMB) posted a net profit attributable to shareholders of RMB40.031 billion for the period from January to September 2026, representing a 3.06% increase year-on-year, according to its third quarterly report. This follows a 2.38% increase in net profit for the same period last year. The bank’s net operating income grew by 5.37% year-on-year to RMB264.764 billion, driven by a 5.83% rise in net interest income to RMB169.379 billion and a 4.54% increase in net non-interest income to RMB95.385 billion.

Total assets increased by 5.28% year-on-year to RMB13,760.456 billion as of September 30, 2026. Loans and advances to customers grew by 2.69% to RMB7,452.971 billion over the same period. The bank’s non-performing loan ratio remained stable at 0.94%, while the allowance coverage ratio decreased slightly to 389.39%. The credit cost ratio (annualised) rose to 0.72%, up from 0.67% in the prior year.

Capital adequacy ratios improved, with the core Tier 1 capital adequacy ratio increasing to 14.39% from 14.16% at the end of 2025. The Tier 1 capital adequacy ratio rose to 16.89% from 16.51%, and the overall capital adequacy ratio increased to 18.65% from 18.24%. The bank’s leverage ratio also improved to 8.23%.

These results come amid a broader slowdown in the Chinese economy, with analysts raising concerns about profitability in the banking sector. Despite a recent GDP rebound, consumer spending remains subdued, and the market has experienced significant volatility. CMB’s stable asset quality, as indicated by the flat non-performing loan ratio, provides a degree of resilience, but the increased credit cost ratio suggests growing risks within the loan portfolio. The bank's increased capital adequacy ratios position it to absorb potential losses, but the narrowing net interest margin—decreasing from 1.87% to 1.82%—highlights challenges in maintaining profitability in a changing interest rate environment.