This evening, $CM BANK (03968.HK)$ Released the third quarterly report, which indicates that in January-September, cm bank achieved revenue of 252.709 billion yuan, a year-on-year decrease of 2.91%; and achieved net income attributable to cm bank shareholders of 113.184 billion yuan, a year-on-year decrease of 0.62%.

The annualized return on average total assets attributable to CM Bank shareholders (ROAA) and the annualized return on average net assets attributable to ordinary shareholders of CM Bank (ROAE) were 1.33% and 15.38%, respectively, down 0.13 and 2.00 percentage points year-on-year.

In terms of scale, as of the end of the reporting period, CM Bank's total assets were 11,654.763 billion yuan, an increase of 5.68% from the end of the previous year, close to 12 trillion. In addition, the total amount of loans and advances was 6,758.751 billion yuan, an increase of 3.84% from the end of the previous year; the total liabilities were 10,495.128 billion yuan, an increase of 5.56% from the end of the previous year; and total customer deposits were 8,732.681 billion yuan, an increase of 7.08% from the end of the previous year, all showing positive growth.

In terms of asset quality, as of the end of the reporting period, CM Bank's non-performing loan ratio was 0.94%, a decrease of 0.01 percentage points from the previous year-end; the bank's provision coverage ratio was 432.15%, a decrease of 5.55 percentage points from the previous year-end; and the loan provision ratio was 4.06%, a decrease of 0.08 percentage points from the previous year-end.

In the report, CM Bank described that during the reporting period, all business operations were steadily carried out, the scale of assets and liabilities steadily increased, and overall asset quality remained stable.

The interest margin narrowed as scheduled, and non-interest income increased and decreased accordingly.

In terms of core income, from January to September this year, CM Bank's net interest margin was 1.87%, and the net interest income margin was 1.99%, both down 20 basis points year-on-year.

In the report, CM Bank stated that the main factors leading to the decrease in net interest margin were the adjustments to loan market quote interest rates (LPR) and existing housing loan interest rates, combined with insufficient effective credit demand, resulting in a year-on-year decrease in the yield of new credit business, leading to a drop in interest-earning asset yield. However, the continuous impact of factors such as the decrease in market-determined deposit rates has shown positive effects, with the year-on-year decline in interest-bearing liabilities cost rate bringing about a certain degree of positive impact on the net interest margin.

In terms of non-interest income, CM Bank achieved non-interest net income of 95.411 billion yuan from January to September, a slight decrease of 2.63% year-on-year, accounting for 37.76% of operating income. The year-on-year decline in non-interest net income was mainly influenced by a combination of fee reductions in some products and weak customer investment willingness, leading to a decrease in fee and commission income. Within non-interest net income, net fee and commission income was 55.702 billion yuan, down by 16.90% year-on-year; other net income was 39.709 billion yuan, up by 28.23% year-on-year, mainly due to increased income from bond and fund investments.

In net fee and commission income, wealth management fee and commission income decreased by 27.63% year-on-year, while insurance, fund, and trust agency decreased to varying degrees, with two areas showing positive growth: commission income from wealth management sales was 5.937 billion yuan, a 47.36% year-on-year increase, primarily driven by the growth in sales scale and optimization of product structure; income from securities trading agency was 0.772 billion yuan, up by 34.03% year-on-year, mainly due to increased demand for securities trading by clients in the Hong Kong capital market.

Meanwhile, CM Bank continued to reduce costs and increase efficiency. From January to September, the bank's operating and management expenses were 74.747 billion yuan, down by 4.56% year-on-year. Among them, employee expenses were 49.361 billion yuan, down by 4.64% year-on-year; operating expenses were 25.386 billion yuan, down by 4.40% year-on-year. Overall, from January to September, the cost-to-income ratio was 29.58%, down by 0.51 percentage points year-on-year.

CM Bank explained this as "lean management, balanced pressure, enhancing cost input and output efficiency, ensuring key strategic and fintech investments, strengthening AI platforms, and building capabilities in big data platforms to advance digital transformation."

Assets are generally stable with continued non-performing asset disposal.

In terms of asset quality, as of the end of the reporting period, CM Bank's non-performing loan ratio was 0.94%, a decrease of 0.01 percentage points from the previous year-end; the bank's provision coverage ratio was 432.15%, a decrease of 5.55 percentage points from the previous year-end; and the loan provision ratio was 4.06%, a decrease of 0.08 percentage points from the previous year-end.

CM Bank continues to actively dispose of non-performing assets, with a total disposal of non-performing loans amounting to 46.107 billion yuan from January to September, including 22.005 billion yuan in routine write-offs, 5.731 billion yuan in recoveries, and 16.267 billion yuan in securitization of non-performing assets.

For non-performing assets, CM Bank stated that it will strengthen the monitoring and management of early overdue business, strictly classify assets, fully provision bad debts, effectively prevent and resolve potential risks, actively use various methods to dispose of existing non-performing assets, and maintain overall asset quality stability.

Concerning the real estate non-performing loans that the market is focusing on, as of the end of the reporting period, CM Bank's real estate industry NPL ratio was 4.80%, a decrease of 0.21 percentage points from the end of the previous year.

At the same time, real estate loans continued to grow. As of the end of the reporting period, CM Bank's real estate industry loan balance was 294.181 billion yuan, an increase of 3.439 billion yuan from the end of the previous year, accounting for 4.58% of CM Bank's total loans and advances, a decrease of 0.13 percentage points from the end of the previous year. Over 85% of the real estate development loan balance is distributed in urban areas of first and second-tier cities, maintaining a good regional structure.

Regarding mortgage loans, CM Bank stated that it has always adhered to the normalization monitoring and reassessment of the value of collateral for existing mortgages. As of the end of the reporting period, CM Bank's weighted average loan-to-value ratio for individual housing loans was 36.29%, an increase of 3.36 percentage points from the end of the previous year. Collateral remains sufficient and stable, and overall risk in individual housing loan business is controllable.

Next, CM Bank stated that it will fully support the construction of a new real estate development model, fully leverage the role of coordination mechanisms, meet the reasonable financing needs of real estate projects, and increase the intensity of loans to "white-listed" projects. Following the principles of legality, compliance, risk control, and commercial sustainability, CM Bank will promote the risk mitigation of real estate enterprises and maintain overall stability of real estate asset quality.

Editor/Rocky