China Merchants Bank Co., Ltd. 3Q09 Results Announcementfile.cmbchina.com/cmbir/2009_1.pdf · 3Q09 Results Announcement. 1 ... This presentation and subsequent discussions may contain

November 2009

China Merchants Bank Co., Ltd.3Q09 Results Announcement

1

Forward-Looking Statement DisclaimerThis presentation and subsequent discussions may contain forward-looking

statements that involve risks and uncertainties. These statements are generally

indicated by the use of forward-looking terminology such as believe, expect,

anticipate, estimate, plan, project, target, may, will or may be expressed to be

results of actions that may or are expected to occur in the future. You should not

place undue reliance on these forward-looking statements, which reflect our belief

only as of the date of this presentation. These forward-looking statements are

based on our own information and on information from other sources we believe

to be reliable. They relate to future events or our future financial, business or other

performance and are subject to a number of uncertainties that may cause our

actual results to differ materially.

2

Agenda

1 Performance Overview

2 Financial Highlights

3

(RMB mn) Group Bank

Select balance sheet items 3Q09 1H093Qvs2QGrowth 3Q09 1H09

3Qvs2QGrowth

Gross loans 1,169,765 1,152,167 1.5% 1,116,965 1,106,181 1.0%

Investment securities 373,008 345,851 7.9% 348,823 325,076 7.3%

Total Assets 2,016,901 1,972,768 2.2% 1,924,882 1,888,958 1.9%

Customer deposits 1,583,494 1,540,682 2.8% 1,501,805 1,460,690 2.8%

Shareholders' equity 87,505 84,185 3.9% 95,366 92,289 3.3%

(RMB mn) Group Bank

Select balance sheet items 3Q09 2008 Growth 3Q09 2008 Growth

Gross loans 1,169,765 874,362 33.8% 1,116,965 833,548 34.0%

Investment securities 373,008 309,819 20.4% 348,823 299,937 16.3%

Total Assets 2,016,901 1,571,797 28.3% 1,924,882 1,499,442 28.4%

Customer deposits 1,583,494 1,250,648 26.6% 1,501,805 1,178,240 27.5%

Shareholders' equity 87,505 79,515 10.0% 95,366 87,507 9.0%

Summary balance sheet

Note:1 Unless otherwise noted，all figures are based on PRC GAAP. 3Q09 figures are from unaudited accounts，1H09 figures

are from reviewed accounts，and 2008 figures are from audited accounts

1 1

1 1

4

(RMB mn) Group Bank

Select I/S items 1-3Q09 1-3Q08 Growth 1-3Q09 1-3Q08 Growth

Net interest income 29,007 35,800 (19.0%) 28,066 35,762 (21.5%)

Non-interest income(adjusted1) 8,987 6,853 31.1% 8,006 6,824 17.3%

Operating income(adjusted1) 37,994 42,653 (10.9%) 36,072 42,586 (15.3%)

Pre-provision operating profit 19,192 26,807 (28.4%) 18,523 26,790 (30.9%)

Profit before tax 16,457 24,659 (33.3%) 15,866 24,657 (35.7%)

Net profit attributable to shareholders 13,078 18,999 (31.2%) 12,611 19,000 (33.6%)

(RMB mn) Group Bank

Select I/S items 3Q09 2Q09 Growth 3Q09 2Q09 Growth

Net interest income 10,384 9,142 13.6% 10,041 8,824 13.8%

Non-interest income(adjusted1) 2,789 3,697 (24.6%) 2,464 3,344 (26.3%)

Operating income(adjusted1) 13,173 12,839 2.6% 12,505 12,168 2.8%

Pre-provision operating profit 6,411 6,566 (2.4%) 6,153 6,361 (3.3%)

Profit before tax 6,279 4,753 32.1% 6,045 4,574 32.2%

Net profit attributable to shareholders 4,816 4,054 18.8% 4,647 3,897 19.2%

Note:1 Adjusted to include net non-operating income2 Unless otherwise noted，all figures are based on PRC GAAP. 2Q & 3Q09 figures are from unaudited account，1H09

figures are from reviewed account，and 2008 figures are from audited accounts

Summary income statement2 2

2 2

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Group Bank

Key ratios 1-3Q09 1H09Change

(percentage) 1-3Q09 1H09Change

(percentage)

Return on average equity 20.9% 20.2% 0.68 18.4% 17.7% 0.67

Return on average asset 0.97% 0.93% 0.04 0.98% 0.94% 0.04

Net fee income ratio (adjusted1) 16.2% 16.3% (0.07) 16.4% 16.4% (0.04)

Non-interest income as % of operating income (adjusted1) 23.7% 25.0% (1.35) 22.2% 23.5% (1.31)

Cost income ratio (excl. business tax) 42.8% 42.0% 0.84 42.4% 41.4% 1.01

Non-performing loan ratio 0.83% 0.86% (0.03) 0.84% 0.87% (0.03)

Coverage ratio 245.1% 241.4% 3.71 251.2% 246.3% 4.86

Loan-to-deposits ratio 73.9% 74.8% (0.91) 74.4% 75.7% (1.36)

Core capital adequacy ratio 6.61% 6.50% 0.11 7.29% 7.12% 0.17

Capital adequacy ratio 10.54% 10.63% (0.09) 10.04% 10.01% 0.03

Effective tax rate 20.5% 18.8% 1.73 20.5% 18.9% 1.62

2

Financial highlights

Note:1 Adjusted to include net non-operating income2 Balance sheet ratios are 3Q or 1H figures，return on average equity and return on average asset are annualized figures3 Unless otherwise noted，all figures are based on PRC GAAP. 3Q09 figures are from unaudited account，1H09 figures are from

reviewed account，and 2008 figures are from audited accounts

22 2

3 3

6

Agenda

1 Performance Overview

2 Financial Highlights

7

302,037

274,020

1H09 3Q 09

(RM

B m

n)

As %

of d

om

estic corp

orate lo

ans

55.6%58.6% 58.0%

20.0%

17.2% 18.1%12.1%

10.8% 11.7%

12.3%

13.4% 12.2%

1,499,442

1,888,958 1,924,882

2008 1H09 3Q 09

(RM

B m

n)

OtherCash and central bank reserveInvestment securitiesCustomer loans

Continued improvement of asset portfolio

Composition of loansAsset composition

SME loans

44.7%

46.8%

Note:1 Unless otherwise noted, all figures are Bank Level numbers2 Unless otherwise noted，all figures are based on PRC GAAP. 3Q09 figures are from unaudited accounts，1H09 figures are from

reviewed accounts，and 2008 figures are from audited accounts3 Percentages may not sum up to 100% due to rounding

56.2% 58.5%

25.0% 29.5%

18.8% 12.1%

1,116,9651,106,181

1H09 3Q 09

(RM

B m

n)

Corporate loans Retail loans Discounted bills

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Strengthening of the low cost advantage of liability

Deposit compositionLiability composition

83.4%

81.3% 82.1%

8.2%

10.3% 9.4%

2.8%

2.0% 2.0%

5.6%

6.3% 6.4%

1,829,5161,796,669

1,411,935

2008 1H09 3Q 09

(RM

B m

n)

OthersNotes payablePlacements with banks and other financial institutionsCustomer deposits

50.1% 52.7%

49.9% 47.3%

1,501,8051,460,690

1H09 3Q 09(R

MB

mn

)

Demand deposits Term deposits

9

Net interest income bottomed with the improvement of NIM

Net interest income Net interest margin

Growth

rate：

13.8

%2.28%

2.24%

1H 09 1-3Q 09

8,824

10,041

2Q 09 3Q 09

(RM

B m

n)

10

2,176

2,464

3Q 08 3Q 09

(RM

B m

n)

1,747

2,030

3Q 08 3Q 09

(RM

B m

n)

Non-interest income (adjusted)

Growth rate：13.2%

1

Stable growth of non-interest income

Fee and commission income

Note:1 Adjsuted to include net non-operating income

Growth：16.2%

Non-interest income as % of operating income

22.2%23.5%

16.0%

2008 1H 09 1-3Q 09

Non-interest income as % of operating incomeCommision income as % of operating income

13.8%16.4%

16.4%

11

225.7%

246.3%251.2%

2008 1H 09 3Q 09

0.49%0.54%

0.37%

2008 1H 09 1-3Q 09

Continued improvement of asset quality and coverage ratio

Credit CostNPL as % of gross loans

Coverage ratio

Note:1 Annualized

1

1

9,499 9,632 9,396

0.87%0.84%

1.14%

2008 1H 09 3Q 09

(RM

B m

n)

NPL balance NPL ratio

12

0.94%

0.98%

1H 09 1-3Q 09

Stable recovery of profitability

ROAA

Note:1 Annualized based on 1-3Q data

ROAE

1

+0.0

4%

+0.7

%

18.4%

17.7%

1H 09 1-3Q 091

13

10.63%

10.54%

1H 09 3Q 09

6.50%

6.61%

1H 09 3Q 09

10.01%

10.04%

1H 09 3Q 09

7.12%

7.29%

1H 09 3Q 09

Stable improvement of core CAR

Group core CAR Group CAR

Bank core CAR Bank CAR

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Q&A