China Merchants Bank (CMB; 600036.SH, 3968.HK) posted a 40% increase in first-quarter net profit to US$864.4 million, the Wall Street Journal reported. This compares to a 33% drop in profit in the first quarter of last year as, like China’s other mid-sized lenders, CMB struggled as its net interest margins narrowed more than those of larger banks. In addition, export-focused private companies that typically make up the bulk of mid-size banks’ customer base, were hit by the global economic downturn. CMB put its revival down to a combination of higher net interest margins and expanded intermediary, or fee-based services including credit cards, insurance and securities products. The bank, China’s sixth-largest lender, has already raised US$3.2 billion via the capital markets this year, boosting its capital adequacy ratio to 11.15%. China CITIC Bank (601988.SH, 0998.HK), China’s eighth-largest lender, reported a 28% increase in first-quarter net profit to US$631.3 million.
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