China Merchants Bank Sells 20 Billion Yuan Bonds
CM BANK (03968.HK) issued 20 billion yuan in capital Bonds.
On April 29, Gelonghui reported that CM BANK (03968.HK) announced that the perpetual capital Bonds (Phase 1) of CM BANK Co., Ltd. would be recorded on April 25, 2025, and completed issuance on April 29, 2025. The issuance scale of this Bonds is 20 billion yuan, with a coupon rate of 2.13% for the first 5 years. The funds raised from this Bonds will be used to supplement the company's Other Tier 1 capital in accordance with applicable laws and regulatory approvals.
Hong Kong stocks closed (04.30) | Hang Seng Index rose 0.51%. AI Concept stocks performed strongly. China Mainland Banking stocks weakened after earnings.
The three major Hong Kong stock indices rebounded from the bottom, with the Hang Seng Index stabilizing above 22,000, and the Hang Seng Technology Index rising over 1%, performing the best.
How to understand the negative profit growth of China Merchants Bank?
China Merchants stated that the main reason for the negative profit growth is the adjustment of the bond market leading to a decline in non-interest income, as well as the potential need for provision to deal with the lagging impact of USA tariff policies. Although profits are under short-term pressure, CM BANK's core operation Indicators remain robust. If excluding the impact of one-time bond market adjustments, CM BANK's revenue continues to show a growth trend.
Major bank ratings丨Goldman Sachs: The first quarter performance of China Merchants Bank is mixed, maintaining a "Buy" rating.
Goldman Sachs published a report indicating that CM BANK's operating profit before provisions and net profit for the first quarter fell by 4% and 2% year-on-year, respectively, which was below the bank's expectations. The performance was mainly affected by a net interest margin decline that was 4 basis points greater than the bank's expectations, and investment income which was 19% less than expected by the bank. Bank loans increased by 5% year-on-year, lower than the system loan growth of 7.4%. Provision for loan reserves increased by 86% quarter-on-quarter, while non-loan asset provisions decreased by 72% quarter-on-quarter. The growth rate of non-performing loans exceeded the growth of loans, indicating a slight increase in the non-performing loan formation rate, posing a challenge to asset quality. The bank believes that CM BANK's first quarter performance is mixed, demonstrating discipline during a possible downturn cycle.
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104255742 : but why is it not buying back its own shares?
Mr Worldwide 世界仔 OP 104255742 : debt to equity at 1.3, it has limited room to take on more debt. it is not worth to repurchase its stock which main business is insurance.