Equity Analysis /
China

CN : China Merchants Bank-A - Returning to a trend of rising ROEs

    Michael Chang
    Michael Chang

    Equity Research Analyst, Banks and Insurance

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    CGS-CIMB
    25 March 2022
    Published byCGS-CIMB

    FY21 net profit growth was 21.5% yoy, the strongest in nine years. Provisioning buffers continue to build, with 4Q21’s provisioning coverage ratio of 484% a record high and well above the 120% regulatory minimum. Interestingly, 4Q21 credit card NPL formation rates worsened qoq (Fig 6) and may have led to CMB slowing its credit card loan growth (Fig 4). Reiterate Add rating, with a lower TP of Rmb71.5.