China Merchants Bank management: Willing to accept the decline in credit card revenue proportion to better control asset quality

The Paper’s reporter | Zhao Jingzhi     The Paper’s editor | Xu Shaohang

On the morning of March 30, China Merchants Bank (SH600036, share price 39.48 yuan, total market cap 995.68B yuan) held its 2025 full-year results press conference. The meeting was attended by Chairman Mi Jianmin, President Wang Liang, Vice Presidents Peng Jiewen and Xu Mingjie, and Chief Information Officer Zhou Tianhong.

The reporter noted that in 2025, the non-performing loan ratio for China Merchants Bank’s retail loans increased by 0.1 percentage points, and the net interest margin rebounded in the fourth quarter against the trend. At the results press conference, institutions generally paid particular attention to China Merchants Bank’s net interest margin and asset quality issues.

Retail credit risk is still in an upward phase

The 2025 annual report shows that the non-performing loan ratios for the bank’s small and micro loans and personal housing loans rose. Among them, the non-performing loan ratio for small and micro loans increased notably, from 0.79% to 1.22%. The non-performing loan ratio for personal housing loans rose from 0.48% to 0.51%, while the non-performing loan ratio for consumer loans decreased from 1.04% to 1.02%.

“For this part of small and micro [businesses], our non-performing loans, watch-list loans, and overdue loans are all rising. Although the non-performing loan ratio for consumer loans has declined to some extent, the watch-list ratio has increased.” Xu Mingjie, Vice President and Chief Risk Officer of China Merchants Bank, said that in the short term, the real estate market is still undergoing adjustments. Whether residents’ employment and income can improve quickly puts some pressure on asset quality such as small and micro loans and consumer loans.

“We have observed that this year, risks across the entire retail credit market are still in an upward phase, and there is also some pressure on credit card asset quality. We will also take proactive measures to control the risk of retail credit and ensure that retail credit quality remains basically manageable.” Xu Mingjie said. Going forward, China Merchants Bank will optimize its business structure, adhere to collateral-based lending as the main approach, and improve credit approval standards—especially for consumer-type loans. It will dynamically adjust the credit approval standards for small and micro loans, continuously optimize the customer segment structure, and stick to early warning, early exposure, early resolution, and early disposal. It will adopt a more proactive strategy to reduce the risk of retail credit and improve the asset quality of retail credit.

It is worth noting that against the backdrop of a decline in credit card issuance volumes, China Merchants Bank’s credit card circulating accounts and circulating card accounts both increased last year, but its credit card transaction volume, credit card interest income, and non-interest income all declined. Among them, transaction volume year-on-year fell by 7.62% to 4.08 trillion yuan.

“Last year, credit cards had negative growth and the balance decreased somewhat. But I believe this strategy is to maintain a steady, low-volatility approach. We select customer segments to mitigate risks. We are willing to accept a decline in the contribution of revenue share, in order to manage asset quality, so our credit card asset quality has remained relatively stable.” Wang Liang, President of CMB, said.

Hope the NIM stabilizes in the second half

Net interest margin (NIM) is the core indicator used to measure a bank’s profitability, representing the net interest income generated per unit of interest-earning assets. In recent years, as market interest rates have continued to fall, banks’ net interest margins have also been narrowing.

According to the annual report, in 2025 China Merchants Bank’s net interest yield was 1.87%, down 0.11 percentage points year-on-year, but the NIM increased quarter-on-quarter in the fourth quarter.

Peng Jiewen, Vice President of China Merchants Bank, said that if CMB’s NIM is viewed by quarters in 2025, the NIM in the first three quarters was 1.91%, 1.86%, and 1.83%, respectively, and in the fourth quarter it returned again to 1.86%. There are two main features. The first is that the NIM is still declining, but the rate of decline is narrowing. In the fourth quarter, there was indeed some rebound. “According to the group-caliber approach, it went up by 3 bp (basis points); according to the company-caliber approach, it went up by 2 bp. This shows that the subsidiaries made contributions.”

The second feature is that China Merchants Bank has made significant efforts in its asset-liability structure, including increasing the share of assets with higher yields as much as possible, and reducing assets with lower yields such as bills, arranging for asset portfolio management accordingly.

Regarding whether the NIM rebound in the fourth quarter can be sustained, Peng Jiewen said that in 2026 the NIM will continue to narrow, but the narrowing magnitude will be better than last year. “This is mainly due to external factors, for example, asset pricing falling because there is insufficient demand for assets. But there is also a technical factor: in May last year we lowered interest rates, and we still had some loans that had not completed repricing. This will be concentrated in this year’s first and second quarters. The first quarter accounts for about 78%, and the rest will be completed in the second quarter.” Peng Jiewen noted that this will correspondingly provide some support to loan yields.

Deposit interest rates repricing will be distributed relatively evenly across the full year. However, Peng Jiewen pointed out that CMB’s demand deposit share is around 50%. Demand deposit interest rates have basically fallen as far as they can go, and fixed-term deposit rates are already low, so there is very limited room for further declines in deposit interest rates.

“In 2026, we hope to achieve several targets. First, to reduce the extent of NIM narrowing; second, to stabilize the NIM as soon as possible. Under the condition that no major new policy is introduced externally, we will try to have it stabilize in the second half. Third, we hope the NIM level will remain market-leading.” Peng Jiewen said.

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