China Merchants Bank (03968.HK) reported a decline in both revenue and net profit for the third quarter of 2024. According to its latest financial statements, the bank achieved a net operating income of RMB 252.709 billion for the period from January to September 2024, reflecting a year-on-year decrease of 2.91%. The net profit attributable to shareholders was RMB 113.184 billion, representing a year-on-year decline of 0.62%. This performance indicates that China Merchants Bank is facing operational pressures within the current economic environment.

(Source: China Merchants Bank Financial Report)

Despite these challenges, the bank's total assets and total loans continue to grow. Specifically, at the end of the reporting period, the total assets of the group reached RMB 11.654763 trillion, a 5.68% increase compared to the end of the previous year. Additionally, the total amount of loans and advances was RMB 6.758751 trillion, reflecting a 3.84% increase from the end of the previous year. Furthermore, customer deposits amounted to RMB 8.732681 trillion, which represents a 7.08% increase compared to the end of the previous year, indicating strong customer trust and support for China Merchants Bank.

In terms of asset quality, China Merchants Bank has maintained a favorable position, with a non-performing loan (NPL) ratio of 0.94%, a decrease of 0.01 percentage points from the end of the previous year. This data demonstrates the bank's robust capability in risk management despite facing challenges. Moreover, the net cash flow was RMB 28.723 billion, representing a substantial year-on-year increase of 435.40%, indicating significant achievements in cash flow management.

However, the net interest margin and net interest yield both decreased by 20 basis points year-on-year, which could pose challenges to the bank's profitability. The net asset value per share was RMB 39.73, an increase of 8.23% compared to the end of the previous year, suggesting growth in shareholder equity.

Regarding stock prices, recent market data indicates that China Merchants Bank's stock has experienced some volatility; nevertheless, it has generally shown an upward trend. During the reporting period (January 1 to October 29), the A-share price of China Merchants Bank rose from RMB 38.6 to a post-adjustment price of RMB 49.

Overall, the third-quarter financial report of China Merchants Bank reflects dual challenges in revenue and net profit; however, the growth in asset quality and customer deposits supports the bank's stable operations. The short-term fluctuations in stock prices reflect market reactions to the earnings results, while the long-term investment value requires a comprehensive assessment in conjunction with the macroeconomic environment and the bank's strategic adjustments. In the context of increasing global economic uncertainty, the robust management and risk control capabilities of China Merchants Bank will be crucial for its future development.

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