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China Merchants Bank Co., Ltd. (CIHKY)

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23.33+0.19 (+0.84%)
At close: 3:46PM EDT
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Previous Close23.14
Open23.09
Bid0.00 x 0
Ask0.00 x 0
Day's Range23.09 - 23.42
52 Week Range19.38 - 27.70
Volume44,358
Avg. Volume27,587
Market Cap200.173B
Beta (5Y Monthly)0.80
PE Ratio (TTM)9.86
EPS (TTM)2.37
Earnings DateN/A
Forward Dividend & Yield0.84 (3.63%)
Ex-Dividend DateJul 01, 2020
1y Target EstN/A
  • Moody's

    CMB Wing Lung Bank Limited -- Moody's announces completion of a periodic review of ratings of CMB Wing Lung Bank Limited

    Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of CMB Wing Lung Bank Limited and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.

  • Jack Ma’s Online Bank Plans a $282 Billion Lending Spree
    Bloomberg

    Jack Ma’s Online Bank Plans a $282 Billion Lending Spree

    (Bloomberg) -- With China’s economy in free fall and millions of small businesses running low on cash, the online lending platform backed by billionaire Jack Ma entered crisis mode.It was mid-February, near the peak of China’s coronavirus outbreak, and MYbank had to decide whether to reduce its exposure or keep doling out loans. After a two-day marathon of calls and emails from self-isolation, the firm’s executives agreed with 25 partner banks on a potentially risky strategy: cut interest rates and turn on the credit taps like never before.MYbank is now on track to issue a record 2 trillion yuan ($282 billion) of new loans to small- and medium-sized companies this year, up nearly 18% from 2019. “In face of the virus outbreak, we have not lowered our business targets,” Jin Xiaolong, the firm’s president, said in an interview.While the lending surge aligns with Chinese government efforts to revive the world’s second-largest economy from its pandemic-induced slump, it comes with plenty of risk for MYbank and its biggest shareholder, Ma’s Ant Financial.This year’s crisis marks the first major stress test of MYbank’s loan algorithms, which crunch real-time payments and other data to evaluate borrowers that often lack collateral and credit histories. If the push to boost lending causes defaults to jump, it could mean less profit for MYbank and by extension Ant, which has plans for an eventual initial public offering.“The model is yet to be tested in a full credit cycle,” said Wang Haimei, an analyst at Shanghai-based research firm WDZJ, which specializes in online lending.MYbank is a major part of Ant’s so-called open banking strategy, which also includes a consumer lending platform and a technology group that sells cloud computing and other infrastructure to lenders. Ant is on track to generate 65% of its revenue from these services by 2021, up from about 35% in 2017, according to a person familiar with the matter.Read more about MYbank here.Before the coronavirus brought swathes of China’s economy to a halt in the first quarter, MYbank said its 3,000-variable risk management system kept defaults at a mere 1.3% of total loans. While Jin declined to provide an updated figure on delinquencies, he said a recent uptick has been within his “expected range.”“Some small businesses are running into operational difficulties and the loan repayment rate has not been as high as before,” Jin said, adding that credit quality during February and March was “predominantly healthy.” MYbank finances some of its loans with its own capital, but other lenders also use the platform to reach smaller borrowers they historically shunned.“With SMEs desperate for financing as they come out of the pandemic and try to resume normal production, profitability shouldn’t be our top priority,” Jin said. “We also found that more and more banks are asking us about leveraging Ant’s risk management technologies and partnering with our platform, so we can support more SMEs in need together.”The Chinese banking system’s non-performing loan ratio nudged up by 0.06 percentage point to 2.04% in March from three months ago, according to official figures, even as lenders deferred payments on or rolled over a combined 1.5 trillion yuan in loans. China Merchants Bank Co., one of the country’s biggest lenders to small businesses, saw its overdue micro-finance loans nearly double from the end of last year to 6.2 billion yuan in the first quarter.Whether delinquencies become a bigger problem will depend on how quickly China’s economy recovers from its 6.8% first-quarter contraction. Slumping global demand is likely to remain a headwind for months to come, but Jin see signs of optimism as the country rolls back its virus lockdown measures.“We can see businesses are recovering in March,” Jin said. “We are confident that we can issue more than 2 trillion yuan of loans this year.”(Adds Jin quote in 10th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • What Opening Up a Bank Account Taught Me About Oil Futures
    Bloomberg

    What Opening Up a Bank Account Taught Me About Oil Futures

    (Bloomberg Opinion) -- With a quarter of its interest-bearing assets overseas, Bank of China Ltd. is by far the most international and outward-looking of China’s largest lenders. But have you tried banking with them lately? I have. In mid-January, I was eager to open an account in Shanghai. With China vowing to increase access to its financial services industry, this process has become a lot easier for people like me, overseas Chinese with a foreign passport — or so I heard. I also desperately needed a mainland account to top up mobile payments on AliPay and WeChat Pay. These apps have become so ubiquitous that the sorry few without them are practically walking down the streets of Shanghai naked. At first, I went to China Merchants Bank Co., because it boasts a strong retail franchise and has a well-designed app. But the process would take up to 10 business days. Only Bank of China has the regulatory clearance to do the paperwork within 24 hours, a friendly branch manager told me.Entering the Bank of China building in Shanghai’s financial hub of Lujiazui felt like going into a courthouse. It was grand, stern and silent. Forty minutes into the extensive know-your-customer paperwork, the teller informed me that I needed a local mobile number; it would cost the bank too much to send text messages to my Hong Kong line. Sensing a lot of legwork and stressed about meeting a deadline, I fled. This kind of bureaucratic inflexibility is costing the bank dearly, and not just my small pile of deposits. Retail investors have lost more than $1 billion from a synthetic WTI futures product that was enthusiastically sold in the spring. The lender sat on its hands until the last day to roll over its May futures and got caught selling at negative $37.63 a barrel, making it the world’s biggest (known) loser amid last week’s oil tumult. It’s not like this volatility came out of nowhere — there had been plenty of warnings. Even U.S. President Donald Trump knew the world was running out of oil storage, which is terrible news for WTI futures because they require physical delivery. Fearful of volatility, global banks from Citigroup Inc. to UBS Group AG in late March liquidated leveraged exchange-traded notes. On April 16, United States Oil Fund, the world’s largest oil ETF, said it would allocate about 20% of its portfolio to a longer-dated contract, from nil previously. Bank of China was either asleep at the switch during those weeks or too caught up in red tape to tweak its exposure.Since the bank is so keen on know-your-customer, let’s examine this practice a little more closely. How synthetic oil futures are a suitable investment for moms-and-pops is beyond my understanding. Each WTI contract consists of 1,000 barrels of oil for a reason — they’re intended for professionals. But to lure retail money, Bank of China diced these up, allowing investors to buy in units of barrels. More than 60,000 clients invested, Caixin reported. In a tone-deaf post last week, which was promptly deleted after a media firestorm, the lender disclosed how this product works in detail, with financial jargon ranging from rollover pricing to margin selling. What’s unexplained, however, is why Bank of China, with over $3 trillion in assets, bothered with this complex retail experiment at all. The answer is the banking system. The same factors that have long benefited China’s megabanks are now working against them. For years, the biggest lenders lived comfortably off household savings, paying deposit rates that were capped by the People’s Bank of China. Smaller regional banks, meanwhile, had to scramble for short-term, unstable and expensive interbank funding.Now the tide is turning. The PBOC is offering more liquidity, which has caused a sharp drop in money market rates. These days, funding costs can be even lower at less creditworthy regional banks. Meanwhile, a 30 basis point fall in the loan prime rate — the benchmark interest charged for banks’ best corporate clients — means that large lenders will see more compression in their loan books’ profit margins. Money has to be made somewhere, which is how we wound up with these enthusiastic sales of exotic futures products.Back in January, all the talk in Lujiazui was of the future of China’s wealth management industry. As part of Beijing’s financial reform, big banks are marching in and setting up separate asset management arms. Registered capital of these new subsidiaries often reaches more than $1 billion, surpassing the size of mutual funds many times over. Would these megabanks become the new BlackRocks of China? Not to worry. Bank of China’s spectacular tumble makes a fine example of these whales and their slow-moving money. In reality, such lenders have little incentive to be nimbler. From 2013 to 2018, state-owned banks sent more than 2 trillion yuan ($282.3 billion) in taxes and dividends to Beijing’s coffers, versus only 135 billion yuan from their non-financial counterparts, data provided by UBS show. Coddled state darlings don’t feel much pressure to study up and improve their trade. As for all the grand ambitions of cross-border portfolio diversification, some whales are ending up at the Chicago slaughterhouse to be butchered by savvy billionaire raiders like Carl Icahn. As for me, the next time I’m in Shanghai — whenever that is — I’ll have to hold my nose and try Bank of China again, because I have only 473 yuan left on my WeChat Pay account. Its building is just a stone’s throw from International Finance Center, where many global banks have their offices. But it feels so distant. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.