On November 2, according to a financial frontline report, China Merchants Bank Co.,Ltd. (ASX: 600036) held its 2026 third-quarter results briefing today.
Li Chong, General Manager of the Risk Management Department, stated that in the first three quarters, our overall risk was controllable, and asset quality operated relatively steadily, but we also faced some challenges. Li Chong further stated that the special mention loan ratio has indeed risen. From a structural perspective, pressure is mainly concentrated in the retail sector. In terms of retail credit and credit cards, the scale of credit card non-performing loans has increased compared to the beginning of the year, but has improved compared to the end of the half-year.
Li Chong explained that the increase in special mention loans on the retail side mainly stems from our implementation of stricter risk classification standards: for certain businesses that peers have already classified as non-performing, while customers are still repaying principal and interest normally, our bank, out of prudent principles, classifies them as special mention loans. Looking ahead, Li Chong stated that overall asset quality is expected to remain relatively stable. We will further strengthen management in key areas, including corporate real estate and retail credit risk control.
Lu Xiaorong, General Manager of the Retail Finance Headquarters, stated that retail loans across the entire industry are indeed still in a trend of rising risk. Issues such as real estate adjustment, residents' income expectations and debt repayment pressure, and joint debt risk will take time to ease. In the short term, the industry as a whole is under pressure, and our bank's retail loan risks have also changed with the industry situation, with relevant risk indicators rising slightly. However, positive signs have also emerged since the beginning of this year: the incremental non-performing generation of mortgage loans, small and micro loans, and consumer loans has slowed down significantly. In the first three quarters, non-performing generation amounted to 16.8 billion yuan, an increase of 500 million yuan year-on-year, significantly narrowing compared to the upward risk range in 2025. The momentum of risk growth has been clearly curbed, showing signs of marginal stabilization. Second, the credit card business situation is relatively special. Affected by industry-wide negotiated installments, prudent recognition of non-performing loans, and other factors, credit card non-performing generation has increased somewhat this year, but in the third quarter, credit card non-performing generation and non-performing ratio have declined quarter by quarter since the second quarter, with the overdue ratio also declining simultaneously. Lu Xiaorong judged that the industry is still in a risk upward cycle, but CM BANK (ASX: 03968)'s retail asset risk is generally stable and controllable, with asset quality maintaining industry leadership. "In the next stage, we will continue to consolidate advantages, maintain strategic focus, reasonably control business growth in light of industry risk conditions, adhere to one-customer-one-policy, continuously optimize risk strategies, strengthen early warning, disposal, and collection, and strive to keep retail business risk stable and asset quality at an industry-leading level," said Lu Xiaorong.
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