Earns 411 million daily! Live coverage of China Merchants Bank's earnings call: net profit breaks 150 billion for the first time, revenue returns to growth

Ask AI · How can wealth management become a key driver of China Merchants Bank’s revenue growth?

Source: The Economic Times Author: Huang Yukun

On March 30, China Merchants Bank held its 2025 annual results briefing, during which the management team focused on responding to questions from the market on multiple areas including net interest margin, wealth management, retail banking, and financial technology. By the close of trading that day, China Merchants Bank’s A-share stock price inched up 0.10%, closing at 39.48 yuan.

At the earnings meeting, the Chairman of China Merchants Bank, Miao Jianmin, said that banks are currently facing ongoing challenges of low interest rates, low interest-rate spreads, and low fee rates, with earnings pressure continuing to mount. Looking ahead to 2026, China Merchants Bank will continue to enhance its three core capabilities—wealth management, digital technology, and risk management—and keep widening its moat.

“In a low interest-rate cycle, we will place stabilizing our interest-rate spread in a more prominent position and maintain a net interest margin leading position in the industry. We will strengthen our strong points and address our weaknesses to enhance our asset-allocation capability, maintaining the advantage of large wealth management. We will focus on pricing and risk management of credit assets to keep asset quality consistently excellent. Meanwhile, we will also promote a reasonable growth in risk-weighted assets, optimize asset allocation,” Miao Jianmin said.

According to the annual report, as of the end of 2025, China Merchants Bank’s total assets exceeded 13 trillion yuan, reaching 13.07 trillion yuan, up 7.56% from the end of the previous year. After declining for two years, operating income returned to growth: in 2025, revenue was up slightly by 0.01% year on year compared with 2024.

Source: China Merchants Bank’s 2025 annual results briefing

China Merchants-related financial institutions’ bank research: First “return to positive” in three years; wealth management takes the lead

After two years, China Merchants Bank’s operating income returned to growth.

In 2023 and 2024, China Merchants Bank’s operating income fell year on year by 1.64% and 0.48%, respectively. In 2025, China Merchants Bank achieved operating income of 337.532 billion yuan, up 0.01%; attributable net profit first surpassed 150 billion yuan, reaching 150.181 billion yuan, up 1.21%, equivalent to earning 411 million yuan per day.

At the earnings meeting, Wang Liang, President of China Merchants Bank, admitted that the bank has indeed faced significant pressure on revenue growth in recent years. As retail banking is the bank’s strength, it has been heavily affected by external policy changes and market changes. Therefore, China Merchants Bank has been making up the gap through other business segments, in order to achieve positive revenue growth.

From the perspective of revenue structure, wealth management business revenue has become the main “contributor” driving China Merchants Bank’s revenue growth. Data show that in 2025, China Merchants Bank recorded net fee and commission income of 75.258 billion yuan, up 4.39%, marking the first “return to positive” since 2022.

Within fee and commission income, net fee and commission income from wealth management reached 26.711 billion yuan, up 21.39%. Of this, income from distributing wealth-management products was 9.347 billion yuan, up 18.98%; fee income from agency fund distribution was 5.846 billion yuan, up 40.36%; agency insurance income was 5.823 billion yuan, down 9.37% year on year; agency trust plan income was 3.518 billion yuan, up 65.55%; and agency securities trading fee income was 1.801 billion yuan, up 62.55%.

The growth in distribution income mainly came from an increase in wealth-management product balances. As of the end of 2025, China Merchants Bank’s retail wealth management product balance stood at 441.2783 billion yuan, up 12.20% from the end of the previous year. In 2025, China Merchants Bank achieved agency non-money public mutual fund sales of 706.466 billion yuan, up 18.13%; agency trust product sales of 224.77 billion yuan, up 155.65%; and agency insurance premiums of 147.655 billion yuan, up 25.96%.

“Last year, our large wealth management—especially retail wealth management—grew rapidly and made up for the shortfall in other non-interest income. But this year there will be further tax-reduction policies, especially regarding public fund distribution. It may be implemented in a third phase, which could bring some impact to our public fund distribution business. So we feel that growth in non-interest income will also face some pressure,” Wang Liang said.

Regarding future plans in wealth management, Wang Liang said that the bank will seize the opportunity presented by residents’ wealth growth and the demand for wealth-management asset allocation, continue to consolidate China Merchants Bank’s advantages. Specifically, on the product side, the product line will be more comprehensive. Whether it is wealth management, funds, insurance, trusts, gold, or overseas asset allocation—based on changes in customer needs, the bank will fully roll out initiatives and accelerate upgrades. Second is the service approach: maintaining a combination of offline and online services. In recent years, the bank has continuously improved its ability to provide offline service to retail customers, especially high-net-worth customers, achieving positive results. Through these efforts, China Merchants Bank will maintain a rapid growth momentum in wealth management and drive overall growth in wealth management revenue.

Wu Zewei, a special research fellow at Su Shanghai Merchants Bank, told a reporter from The Economic Times that from a long-term perspective, the banking industry still faces multiple challenges in wealth management—for example, under a low interest-rate environment, the scarcity of assets (asset scarcity) is intensifying, and banks need to improve multi-asset allocation capabilities to balance returns and risks. In addition, competition in the market is becoming increasingly intense. Diverse entities such as fund companies, securities firms, and internet platforms continue to siphon away customers and capital; customers’ expectations for professional services are rising, and banks also need to continue investing in building their investment advisory/investment-encouragement teams and customer companionship mechanisms.

Fourth-quarter interest-rate spread rises quarter over quarter; Peng Jiawen: it will still narrow further this year

In 2025, China Merchants Bank’s net interest income was 215.593 billion yuan, up 2.04%, accounting for 63.87% of total operating revenue, up 1.27 percentage points from 2024.

From the perspective of net interest margin, in 2025, China Merchants Bank’s net interest margin under the group scope and under the corporate scope was 1.87% and 1.92%, respectively, down 11 and 12 basis points year on year. In the fourth quarter of 2025, the group and corporate net interest margins were 1.86% and 1.91%, respectively, up 3 and 2 basis points compared with the third quarter.

The annual report shows that, in order to keep net interest margin relatively stable, China Merchants Bank further strengthened asset-liability portfolio management and promoted a quarter-over-quarter stabilization and rebound in net interest margin in the fourth quarter. Specifically, on the asset side, it increased efforts to organize effective assets, strengthened portfolio management across major asset categories, maintained strict pricing management, and pushed the quarter-over-quarter decline in asset yield rates to narrow. On the liability side, it focused on driving growth in low-cost core deposits, moderately reducing high-cost liabilities. In the fourth quarter, the share of current deposits rose quarter over quarter to some extent. It also flexibly arranged the absorption of market-oriented funds and continued to optimize the portfolio allocation of major liabilities, further advancing a steady decline in the cost rate of liabilities.

Although the interest-rate spread fell for the full year, China Merchants Bank’s interest-rate spread remains at a leading level within the industry. Wind data show that as of March 29, 12 listed banks had already disclosed their 2025 net interest margin figures, and China Merchants Bank’s net interest margin ranked first.

“On the asset side, when the 5-month LPR fell in May last year, we still had some interest-bearing loans that had not completed repricing. The first and second quarters are the release period for loan repricing, which correspondingly will drive loan yields downward. On the liability side, the repricing of deposits last year also did not fully complete, but China Merchants Bank’s current deposit share is around 50%. For that part, the interest rate has already fallen as much as it can. The remaining time-deposit rates are already at relatively low levels, so the room for further decline is limited,” explained Peng Jiawen, vice president of China Merchants Bank, at the earnings meeting.

Based on the above judgment, Peng Jiawen said that for this year’s net interest margin trend, it will still narrow further, but the magnitude of narrowing may be better than last year. Peng Jiawen further said that in 2026, China Merchants Bank still needs to achieve three goals: (1) the amount of narrowing in the interest-rate spread becomes smaller, (2) net interest margin is stabilized as soon as possible, and (3) it continues to maintain a leading position in net interest margin within the market.

Last year AI replaced human work for 15.56 million hours; Miao Jianmin: We need to build the first intelligent bank in the industry

As AI large-model technology continues to evolve, the banking industry is fully embracing AI and proactively transforming.

In the first half 2025 report, China Merchants Bank first put forward the “AI First” concept. The bank said it will take “AI First” to lead the construction of a smart digital China Merchants Bank, giving priority status to AI capability building, being the first to build an AI-type organization, and striving to become a globally leading intelligent bank.

According to annual report data, in 2025, China Merchants Bank’s IT spending reached 12.901 billion yuan, accounting for 4.31% of the bank’s operating income. In 2025, China Merchants Bank’s AI construction and application were comprehensively advanced. At the technology-system level, it built world-leading intelligent computing infrastructure. In 2025, daily average Tokens throughput increased by 10.1 times compared with 2024, and 183 specialized models were deployed. At the scenario-application level, by the end of 2025, it had deployed 856 scenario applications across multiple areas including retail finance, wholesale finance, risk control, operations, and office work, effectively improving business processing efficiency and service levels.

“Overall, in 2025, the large-model applications at China Merchants Bank have already played a full role. We have made very good progress in both improving quality and increasing efficiency. In terms of efficiency improvement, we achieved 15.56 million hours of human replacement for the full year,” Zhou Tianhong, Chief Information Officer of China Merchants Bank, said at the earnings meeting. Since last year, China Merchants Bank’s large-model engineering system has made good progress, and the iteration cycle of large-model applications was shortened from an average of 32 days in 2024 to 8 days. This has promoted the rapid advancement of large-model applications.

Zhou Tianhong said that under regulatory requirements, large-model applications in the banking industry are generally in a “human + Agent” model. In some job fields, it is still not workable for Agent to fully replace humans at this stage. “Regarding large-model promotion, some employees may have concerns and think that large models will replace humans. The concept we have emphasized at China Merchants Bank is that those who are eliminated in the future will be those who cannot use large models. So based on our token growth speed, employees as a whole are still fairly open and are actively embracing technology,” Zhou Tianhong said.

“Previously, China Merchants Bank was ahead of the industry in financial technology. Now what we are proposing for China Merchants Bank is to build the first intelligent bank in the industry.” Miao Jianmin said. He added that in the future the banking industry will differentiate mainly in two areas: one is operations, and the other is technology. China Merchants Bank has already formed fairly strong core competitiveness in the area of operations. In the next step, it will build a moat in the area of technology as well. This is also so that the bank can continue to maintain long-term core competitiveness in responding to industry competition and in a downturn cycle.