China Merchant Bank's 1Q15 earnings jump 15.2% YoY to RMB17.2b

Robust interest partly drives solid bottom-line growth.

China Merchants Bank’s (CMB) 1Q15 earnings were up 15.2% YoY to RMB17.2b.

According to a research note from CCB International, further, PPOP growth of 30.3% was driven by improving NIM (up 14bp YoY to 2.9%).

It was driven by improving NIM on a rise in low-cost retail deposits, a decline in interbank funding costs, and robust fee income (49.2% YoY) from WMP and agency sales services.

Further, succumbing to intense NPL pressure, credit cost rose 68bp YoY and 42bp QoQ to 198bp in 1Q15. CMB’s NPL ratio was up 13bp QoQ in 1Q15 versus 28bp YoY in 2014.

Here's more from CCB International:

Interbank business resumes growth with conservative provisioning in place.

CMB reduced non-standard asset investments in 2H14 to comply with the PBoC’s Circular 127.

In 1Q15, investments in non-standard assets grew 33% QoQ to RMB485b or 10% of total assets.

However, CMB has adopted a conservative provisioning strategy for these assets.

As a precaution, CMB increased provisioning to the relatively high level of 1.47% in 1Q15, up 4bp QoQ.