On November 2, according to a financial frontline report, China Merchants Bank Co., Ltd. (ASX: 600036) held its 2026 third-quarter results briefing today, where Vice President and concurrently Chief Financial Officer Peng Jiawen stated that the banking sector's net interest margin will continue to face downward pressure, and the industry as a whole will still be operating under strain.
"From the data published in the first three quarters, the banking sector's interest margin has shown a characteristic of phased stabilization," Peng Jiawen said. "We have also seen data from our peer banks, some of which have already begun to stabilize and rebound, but our overall judgment is that it remains a phased stabilization."
Peng Jiawen emphasized that looking ahead, the downward pressure on interest margins has not been fundamentally alleviated. On the one hand, overall loan demand will still face insufficiency, competition around loan pricing remains fierce, and downward pressure on asset yields will persist. On the other hand, from the liability side, the room for further reduction in overall deposit costs should be said to be very limited.
He added, "For CM BANK (HKEX: 03968), we have consistently maintained a relatively high proportion of retail loans, so next year we will still face significant pressure in retail loan growth. Therefore, changes in the overall credit structure will also drive down the level of asset yields."
Peng Jiawen stressed that for some time to come, downward pressure on interest margins will still exist. It is still difficult to say that an inflection point has emerged or that a rebound has begun, so the banking industry must make preparations in all aspects to cope with the pressure on interest margins.
He stated, "For China Merchants Bank Co., Ltd., we will conduct asset-liability management in a more refined and lean manner. Our goal remains unchanged: to strive for a continuous narrowing of the interest margin decline and to maintain an industry-leading interest margin level."
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