1、H Share Stock Code:03968Annual ReportChina Merchants BankAnnual Report 2022(H share)1ContentsContents2Definitions2Significant Risk Warning3Important Notice4Chairmans Statement8Presidents Statement13Chapter I Company Information18Chapter II Summary of Accounting Data and Financial Indicators22Chapter

2、 III Management Discussion and Analysis223.1 Analysis of Overall Operation223.2 Analysis of Income Statement293.3 Analysis of Balance Sheet333.4 Analysis of Loan Quality393.5 Analysis of Capital Adequacy423.6 Results of Operating Segments433.7 Other Financial Disclosures under the Regulatory Require

3、ments433.8 Implementation of Development Strategies473.9 Key Business Concerns in Operation583.10 Business Operation783.11 Risk Management843.12 Outlook and Coping Tactics87Chapter IV Environmental,Social and Governance(ESG)98Chapter V Corporate Governance141Chapter VI Important Events149Chapter VII

4、 Changes in Shares and Information on Shareholders161Chapter VIII Financial StatementsChina Merchants BankAnnual Report 2022(H share)2Definitions/Significant Risk WarningDefinitionsSignificant Risk WarningThe Company has disclosed herein the major risks involved in its operations and the adopted ris

5、k management measures.Please refer to Chapter III for the details in relation to risk management.The Company,the Bank,CMB or China Merchants Bank:China Merchants Bank Co.,Ltd.The Group:China Merchants Bank and its subsidiariesCBIRC:China Banking and Insurance Regulatory CommissionCSRC:China Securiti

6、es Regulatory CommissionHong Kong Stock Exchange or SEHK:The Stock Exchange of Hong Kong LimitedHong Kong Listing Rules:The Rules Governing the Listing of Securities on the SEHKCMB Wing Lung Bank:CMB Wing Lung Bank LimitedCMB Wing Lung Group:CMB Wing Lung Bank and its subsidiariesCMB Financial Leasi

7、ng or CMBFL:CMB Financial Leasing Co.,Ltd.CMB International Capital or CMBIC:CMB International Capital Holdings Corporation LimitedCMB Wealth Management:CMB Wealth Management Company LimitedChina Merchants Fund or CMFM:China Merchants Fund Management Co.,Ltd.CIGNA&CMAM:CIGNA&CMB Asset Management Com

8、pany LimitedCMB Europe S.A.:China Merchants Bank(Europe)Co.,Ltd.(招商銀行(歐洲)有限公司)CIGNA&CMB Life Insurance:CIGNA&CMB Life Insurance Co.,Ltd.MUCFC:Merchants Union Consumer Finance Company LimitedCMB YunChuang:CMB YunChuang Information Technology Co.,Ltd.with 100%equity interest held by the Company indire

9、ctlyCMB Network Technology:China Merchants Bank Network Technology(Shenzhen)Co.,Ltd.with 100%equity interest held by the Company indirectlyDeloitte Touche Tohmatsu Certified Public Accountants LLP:Deloitte Touche Tohmatsu Certified Public Accountants LLP(Special General Partnership)SFO:Securities an

10、d Futures Ordinance(Chapter 571 of the Laws of Hong Kong)Model Code:Model Code for Securities Transactions by Directors of Listed Issuers of Hong Kong Stock ExchangeChina Merchants BankAnnual Report 2022(H share)3Important NoticeImportant Notice1.The Board of Directors,the Board of Supervisors,Direc

11、tors,Supervisors and senior management of the Company confirm that the contents in this annual report are true,accurate,and complete and have no false representations,misleading statements or material omissions,and they will severally and jointly accept legal responsibility for such contents.2.The 1

12、5th meeting of the Twelfth Session of the Board of Directors of the Company was convened at the Shenzhen Training Centre on 24 March 2023.The meeting was presided by Miao Jianmin,Chairman of the Board of Directors.14 out of 15 eligible Directors attended the meeting in person.Due to business engagem

13、ent,Su Min,Non-Executive Director,was absent from the meeting and appointed Zhang Jian(Non-Executive Director)as her proxy to attend the meeting.9 Supervisors of the Company were present at the meeting.The convening of the meeting complied with the relevant provisions of the Company Law of the Peopl

14、es Republic of China and the Articles of Association of China Merchants Bank Co.,Ltd.3.Deloitte Touche Tohmatsu Certified Public Accountants LLP and Deloitte Touche Tohmatsu(both being auditors of the Company)have separately audited the 2022 annual financial report prepared in accordance with the PR

15、C Generally Accepted Accounting Principles and International Financial Reporting Standards,and have separately issued standard auditing reports with unqualified opinions.4.Unless otherwise stated,all monetary sums stated in this report are expressed in RMB.5.Miao Jianmin,Chairman of the Company,Wang

16、 Liang,President,Chief Executive Officer and Secretary of the Board of Directors,Peng Jiawen,Executive Assistant President and Chief Financial Officer and Li Li,the person in charge of the Finance and Accounting Department,hereby make representations in respect of the truthfulness,accuracy and compl

17、eteness of the financial statements in this report.6.The Board of Directors of the Company recommended the payment of a cash dividend of RMB1.738(tax inclusive)for every ordinary share for the year of 2022.The implementation of the profit appropriation plan is subject to consideration and approval a

18、t the 2022 Annual General Meeting.In 2022,the Company did not transfer any capital reserve into share capital.7.We have included in this report certain forward-looking statements with respect to the financial position,operating results and business development of the Group.We use words such as“will”

19、,“may”,“expect”,“try”,“strive”,“plan”,“anticipate”,“aim at”,and similar expressions to indicate forward-looking statements.These statements are based on current plans,estimates and projections.Although we believe that the expectations reflected in these forward-looking statements are reasonable,we g

20、ive no assurance that these expectations will turn into reality or prove to be correct.Therefore,they should not be deemed as the Groups commitments.Investors should not place undue reliance on such statements and should pay attention to investment risks.You are cautioned that such forward-looking s

21、tatements are related to future events or future financial position,business,or other performances of the Group,and are subject to a number of uncertainties which may cause substantial differences from those in the actual results.China Merchants BankAnnual Report 2022(H share)4Chairmans StatementCha

22、irmans StatementThe year 2022 unfolded in a monumental and uplifting way with the successful opening of the 20th National Congress of the CPC.It was also a year when CMB achieved remarkable accomplishments against headwinds.Against the backdrop of turbulent global environment,mounting domestic“tripl

23、e pressures”(contracted demand,disrupted supply and weakened expectations)and the impact of a spate of unpredictable factors,CMB steadily fulfilled the requirements of“maintaining stability in four areas”(strategy,corporate governance mechanism,operation management and talent team)under the general

24、keynote of making steady progress,and brought about dynamically balanced development in respect of“Quality,Efficiency and Scale”.In terms of effective quality improvement,the return on average equity(ROAE)attributable to the Banks ordinary shareholders continuously rose to a high level of 17.06%.The

25、 non-performing loan ratio remained below 1%and the allowance coverage ratio was 450.79%,demonstrating our strong risk compensation ability.In terms of reasonable scale growth,we recorded total assets exceeding RMB10 trillion,retail assets under management(AUM)exceeding RMB12 trillion,and deposits i

26、ncrement of more than RMB1 trillion.Our customer base was further consolidated as the number of retail customers increased to 184 million and corporate customers increased to 2,526,100.Pursuing progress,we maintained high-quality growth that transcended economic cycles.The acceleration of major chan

27、ges unseen in a century,the norms to embrace uncertainties and instabilities in the global political,economic and financial landscape,the divergence of monetary policy cycles between the United States and China,the shift of Chinas economy from rapid growth stage to high-quality growth stage,and the

28、restructuring and upgrading of industries have all exerted profound impacts on the banking industry.In the face of cyclical fluctuations,we maintained our strategic determination by building our“Malik Curve”for transformation and development,expanding our capital-light business and strengthening our

29、 capital-heavy business.We enlarged our“circle of friends”by further increasing access to our wealth management platform,and propelled our extensive wealth management flywheel,leading to steady growth in our asset management,investment banking and custodian businesses.We maintained our advantage in

30、low-cost liabilities,and continuously optimised asset allocation,allowing the Bank to become resilient in terms of net interest margin.We made every effort to build a“Six All”comprehensive risk management system to enhance our cyclical risk prevention and control capabilities,which allowed us to eff

31、ectively control risks in key areas and attain significant breakthroughs in unified risk management.Blazing new trails,we relied on innovation as the core driver of development.High-quality growth is,in essence,innovation-driven.Carrying with the“China Merchants Inheritance,Hailiao Spirit(海遼精神)and S

32、hekou Gene”,we are committed to market-oriented mechanisms and innovation in products,services,technology and business models.The sci-tech finance service system has been put in place.We piloted sci-tech finance sub-branch in branches to provide professional services for enterprises pursuing technol

33、ogy and innovation,with a balance of nearly RMB300.0 billion in loans extended to technology enterprises1,representing a 45%growth.With our continuous investments in Fintech,we took another lead in the industry in terms of Fintech as we successfully completed a full-scale cloud deployment on the bas

34、is of non-interruption of operation,non-shutdown of machines and no impact on clients.We empowered business expansion and improved management quality and efficiency through digitalisation.We also exported technological capabilities to serve clients digital transformation.Thanks to the application of

35、 our AI-powered intelligent customer service and other technologies,we relieved our staff from repetitive,time-consuming work equivalent to a workload of over 12,000 individuals.Aspiring for good,we are committed to serving the real economy and fulfilling our corporate social responsibility.We care

36、for society,and leverage the strategic opportunity of the governments initiative for expanding domestic demand in China to provide financial services for the high-quality growth of the real economy and peoples needs for better livelihoods.We vigorously supported the high-quality growth of the manufa

37、cturing industry,which was demonstrated by the fact that our loans to the manufacturing industry grew by 39%,including a 55%increase in medium-and long-term loans.We established the inclusive finance departments in our Head Office and branches so that our financial services become more accessible an

38、d inclusive,thus contributing to“an increase in both loans and clients”under the inclusive finance segment.The Bank as a whole has been actively engaged in social welfare,and as a part of our commitment to“continuously offering support to households relieved from the poverty”,we have been assisting

39、impoverished households in Wuding and Yongren counties in Yunnan province for 23 years in a row,during which we have been actively involved in social welfare projects and have been carrying out public welfare donations and volunteer service activities.We care for 1 Represents loans granted to techno

40、logy enterprises such as“specialised,competitive,distinguished,and innovative(專精特新)”enterprises,high-tech enterprises and technology-based SMEs by the Company.China Merchants BankAnnual Report 2022(H share)5Chairmans StatementMiao JianminChairman China Merchants BankAnnual Report 2022(H share)6Chair

41、mans Statementour clients with the original aspiration of“being customer-centric and creating value for customers”.We iterated the“CMB TREE Asset Allocation Service System”to enhance client companionship and focused on improving customer experience of their long-term holding of wealth management pro

42、ducts amid the complex and volatile market environment.We care for our staff by adopting strict as well as caring attitude in management,under the people-oriented mechanism and the“Six Can-do”mechanism.CMB was selected as one of the top three best employers in China by Z in 2022.We are environment-f

43、riendly as we formulated the“Green Development Plan of CMB“(招商銀行綠色發展規劃)and fully implemented the ESG concept.In 2022,our green loans increased by 35%,significantly higher than the overall growth rate of loans.Our MSCI ESG rating for 2022 was“A”,maintaining the best level among publicly listed banks

44、in the domestic market.“Our performances look like low-hanging fruits but are actually hard-earned results”.Having withstood major internal and external challenges and undergone market pressure tests,we navigated through 2022 with greater stability and pragmatism in development,greater prudence and

45、consistency in risk control,and greater determination in improving modern corporate governance with the Chinese characteristics and pursuing professional and market-oriented development.A grand blueprint has been unveiled to promote the great rejuvenation of the Chinese nation through a Chinese path

46、 to modernisation.Keeping in mind the strategic vision of“building the best value creation bank with innovation-driven development,leading model and distinguished features”,we will better integrate ourselves into the overall development of the country with our own high-quality growth to serve the re

47、al economy and guard the risk bottom line,thus contributing our efforts to the Chinese path to modernisation.Focusing on value creation.We are determined to pursue business success and committed to creating value for our customers,employees,shareholders,partners and society.By creating value for our

48、 customers,employees,partners and society,we will ultimately create value for our shareholders.We will further our commitment in investor communications in order to attract more investors,and we will arouse more market interest towards the Chinese market,Chinese assets and CMB.Accelerating the trans

49、formation of business model.We will strengthen capital-heavy business while expanding capital-light business,aiming to strike a balance between them.We will strengthen capital-heavy business by improving asset structure,optimising asset allocation and enhancing asset pricing capabilities in order to

50、 promote the rapid development of sci-tech finance,green finance and inclusive finance.We will also expand capital-light business by developing extensive wealth management.We will improve on-boarding and risk management to develop a high-value business cycle chain involving“wealth management asset m

51、anagement investment banking”.By highlighting that capital-heavy business is the foundation of capital-light business,we will have an industry-leading business model through the balanced development between these two businesses.Pursuing innovation-driven development.We have been willing,passionate a

52、nd able to pursue innovations.As we did in the past,we dare to break new grounds.We vigorously promote the development of sci-tech finance,and accelerate the launching of sci-tech finance sub-branches and the integration of investment banking business and commercial banking business to create a full

53、 life-cycle sci-tech finance service system,thus facilitating the virtuous cycle of“technology industry finance”.We will continue to enhance Fintech input and accelerate the full application of Fintech to support business transformation and enhance operational efficiency.China Merchants BankAnnual R

54、eport 2022(H share)7Chairmans StatementThe year 2023 marks the beginning of the full implementation of the spirit of the 20th CPC National Congress and is crucial for the implementation of“the 14th Five-Year Plan”.We will make sure that our strategic insights penetrate looming mirage,our strategic d

55、etermination weathers disturbing noises,and our strategic implementation overcomes ups and downs.Bearing in mind that“in vain talks a country languishes,on solid work it flourishes”,we will embrace innovation and live up to the times and move forward with courage.With our passion and incessant innov

56、ation,we will write a new legendary chapter of high-quality growth of CMB and achieve further success in the Chinese path to modernisation.China Merchants Bank Co.,Ltd.Chairman24 March 2023China Merchants BankAnnual Report 2022(H share)8Presidents StatementPresidents StatementIn 2022,in the face of

57、the complicated and volatile operating environment at home and abroad,the management of the Bank resolutely pursued the strategic objectives set by the Board of Directors,adhered to the dynamically balanced development of“Quality,Efficiency and Scale”,and maintained strategic determination,overcame

58、the impact arising from many adverse factors,and achieved a stable operation by”stabilising our strategies,mechanisms and workforce”,thereby achieving the expected operating objectives.We continued to consolidate the fortress-style balance sheet and achieved good operating results.As of the end of 2

59、022,total assets of China Merchants Bank amounted to RMB10.14 trillion,reaching a new milestone of RMB10 trillion;net operating income amounted to RMB344.740 billion,representing a year-on-year increase of 4.02%;and net profit attributable to shareholders of the Bank amounted to RMB138.012 billion,r

60、epresenting a year-on-year increase of 15.08%;ROAA and ROAE were 1.42%and 17.06%,representing a year-on-year increase of 0.06 and 0.10 percentage point,respectively;asset quality remained stable with a non-performing loan ratio of 0.96%and an allowance coverage ratio of 450.79%,demonstrating our ris

61、k compensation capability remaining strong;the core Tier 1 capital adequacy ratio and capital adequacy ratio under the Advanced Measurement Approach were 13.68%and 17.77%,up by 1.02 and 0.29 percentage point from the end of the previous year,respectively,maintaining an endogenous capital growth.We r

62、esolutely implemented the development strategies determined by the Board of Directors and vigorously advanced high-quality growth.We further consolidated the dominant position of retail finance.The number of our retail customers reached 184 million,and net operating income from retail businesses acc

63、ounted for 55.52%;our wealth management capability was further enhanced as we took the“Original Aspiration Plan”as a carrier to fully promote the“CMB TREE Assets Allocation Service System”.Total assets under management(AUM)from retail customers amounted to RMB12.1 trillion,and the number of customer

64、s holding wealth management products exceeded 43.00 million and the number of private banking customers surpassed 130,000.Moreover,we further improved and strengthened the businesses of corporate finance,investment banking and financial markets,and asset management,deepened the corporate customer se

65、rvice system featuring segmentation and classification-based management and strengthened our capabilities in industry professionalisation and investment banking and commercial banking integration services.As a result,the number of our corporate customers reached 2,526,100;the balance of aggregate fi

66、nancing products to corporate customers(FPA)was RMB5.12 trillion;the total value of bonds with the Bank as the leading underwriter reached RMB675.001 billion;the trading volumes on behalf of the corporate customers amounted to USD221.980 billion;the total assets under custody business stood firm at

67、RMB20 trillion,and total amount of asset management business2 reached RMB4.41 trillion.We adhered to the business logic of the value creation chain of“volume growth revenue growth profit growth value growth”.We achieved a reasonable growth in volume and effective quality improvement,promoted value c

68、reation and achieved high-quality growth by putting pricing,costs,risks and capital under control.We adhered to the core values of“being customer-centric and creating values for customers”and continuously improved our customer service capabilities.We embraced long-termism and abandoned commercial op

69、portunism without compromising long-term development for short-term interests.We increased efforts to enhance the three major capabilities of“wealth management,Fintech and risk management”and forged our sustainable development capability.We pushed forward comprehensive operations and international m

70、anagement.In addition,we proactively put into practice of the strategic vision of“building the best value creation bank with innovation-driven development,leading model and distinguished features”.We thoroughly conducted management reforms and constantly improved operation management.We continued to

71、 consolidate risk management foundation,established the risk concept of“equally emphasising risk control,risk management and risk operation”,optimised the risk management organisation structure,and established the risk management system covering“all customers,all assets,all risks,all institutions,al

72、l processes and all factors”.We also fostered the compliance culture of“compliance first,compliance creates value and compliance starts at the top”,and built a fortress-style overall risk and compliance management system.Our capacity for refined management was further improved.We enhanced standardis

73、ed management,improved systems,optimised processes,and established the management rules which are open,transparent,widely recognised,systematically complete and effective.We also strengthened data-based governance,maintained a strong information base,optimised system functions for more accurate and

74、scientific decision-makings.We enhanced differentiated management,unleashed the development vitality of different management bodies,and tapped on the growth potential in key areas and niche fields.Our cost management efficiency kept improving.We kept optimising cost structure by retaining necessary

75、expenses and reducing those with lower priority to formulate a more efficient input-output structure,resulting in“two consecutive drops”in cost-income ratio.Furthermore,we improved performance management,practiced the value-oriented performance guidance,optimised the full-process performance managem

76、ent system,and improved the accuracy,scientificity and effectiveness of performance evaluation.2 Refers to the total asset management business of several subsidiaries of the Company,namely CMB Wealth Management,China Merchants Fund,CIGNA&CMAM and CMB International Capital.China Merchants BankAnnual

77、Report 2022(H share)9Presidents StatementWe accelerated digital transformation to create a“digital bank”.We successfully completed the three-year cloud migration project,and initially constructed a new Fintech infrastructure consisting of“one cloud and two middle offices(data office and technology o

78、ffice)”,which consolidated the Banks foundation for digital transformation and injected a strong impetus to the innovation-driven initiatives.Focusing on online,data-based,intelligent,platform-based and ecological operation,we promoted digital reshaping in respect of customers,channels,businesses,pr

79、oducts and management,in an effort to create a“digital bank”.We continued to enhance the“people+digitalisation”capability in retail finance.The online operation rate of wholesale finance was improved significantly,empowering the digital transformation of corporate customers with Fintech offerings su

80、ch as treasury management cloud and Xin Fu Tong(薪福通).The efficiency of management and operation was improved significantly,with the AI-powered technologies and other technologies relieving our staff from repetitive,time-consuming work equivalent to a workload of over 12,000 individuals.We further in

81、vested in Fintech with the accumulative information technology expenses reaching RMB14.168 billion during the year,representing a year-on-year increase of 6.60%;and we also strengthened the building of a talent pool which hosted 10,800 technology talents at the end of the year,up by 8.00%from the en

82、d of the previous year.We continued to build up talent pool and promote the CMB culture.Inheriting the good tradition of“running bank with expertise”,we always respect experts and cherish talents.We strengthened the“Six Can-do”mechanism(六能機制,management staff can be promoted or demoted;remuneration c

83、an be increased or decreased;qualified talents can be recruited and those unqualified can be dismissed).We attracted talents with career prospects at CMB,improved the standardised multi-level talent development and training system,enhanced the professional capabilities of our employees and fostered

84、a broad platform for employees to realise their career aspirations.We inspired our employees with the CMB culture,promoted the“people-centred”culture of“respect,care and sharing”,strengthened the work style of“service,enterprising spirit,pragmatism,innovation and incisiveness”,and further boosted th

85、e strength,cohesion and unity of the whole bank.We proactively implemented the ESG concept and demonstrated CMB commitments.We have established the responsibility system of“environment,society and governance”,and strove to create greater social value and facilitate high-quality growth in economy and

86、 society while pursuing commercial value.As a result,we ranked among domestic top players in both the MSCI and S&P ESG ratings.We were keen to explore sustainable developments in green finance,sci-tech finance and inclusive finance,and bolstered the virtuous cycle of“technology,industry and finance”

87、,resulting in a higher growth in green finance,sci-tech finance and SME inclusive finance loans when compared to the average of all loans of the Bank at the end of the year.We gave full play to the advantages of Fintech and retail businesses to promote peoples livelihood.We improved the work mechani

88、sms for protecting consumers rights and interests,and focused on the traceability and rectification of issues that customers most frequently complain about,so as to improve customer satisfaction.We kept giving back to society with a loving heart and donated a total of RMB94.76 million to society in

89、the year.2022 marks the 35th anniversary of the establishment of CMB.Over the past 35 years,China Merchants Bank has grown into one of the top-tiered banks in the world from having only one outlet with an initial capital of RMB100 million and 34 employees.Such impressive achievement was attributable

90、 to the great reform and opening-up initiatives through which China has developed into the worlds second largest economy.It also benefited from CMBs“five insistences”,that is,unswervingly insisting on the“Two Consistent Principles”,insisting on the path of marketisation and professionalisation,insis

91、ting on the innovation-driven development,insisting on the differentiated development strategies and insisting on the prudent risk management philosophy.Moreover,it was also the result of generations of CMBers inheriting“China Merchants Inheritance and Shekou Genes”and practicing the strong call of“

92、In vain talks a country languishes,on solid work it flourishes”in the great era.2022 is also the 20th anniversary of A-share listing of CMB.China Merchants Bank has achieved a qualitative leap through two listings of A shares and H shares in which it has greatly improved its corporate governance and

93、 management level,accelerated the process of aligning with international standards,and improved its market influence and brand image.We maintained continuously rapid growth in both operating income and profit,and distributed a cumulative dividend of RMB259.6 billion,with a compound annual growth rat

94、e of 17.35%for the A-share price(after reversion)and 16.24%for the H-share price(after reversion),bringing lucrative returns to Shareholders and thus gaining long-term trust and support from various investors.In 2022,under the strong leadership of the Board of Directors,we withstood internal and ext

95、ernal challenges and the stress test in capital markets and maintained stable development momentum,demonstrated development resilience,and fully reflected our strengths in corporate governance,strategies,management and culture.We showcased our continuous efforts,and strived to achieve adequate commu

96、nication,thus enabling us to continuously gain the trust from shareholders,investors and the market participants,and strong support from regulators,customers and all walks of life.All of this has further strengthened our confidence in creating a better future.China Merchants BankAnnual Report 2022(H

97、 share)10Presidents StatementWang Liang President and Chief Executive Officer China Merchants BankAnnual Report 2022(H share)11Presidents StatementLooking forward to 2023,the international and domestic business environment will remain severe and complex,while Chinas economic development seeks progre

98、ss while maintaining stability,our risk pressure has been effectively alleviated.Under the background where the effectiveness and efficiency of proactive fiscal policy has been enhanced and prudent monetary policy has been more precise and powerful,opportunities will outweigh the challenges in the b

99、anking development.“Those who do always succeed,and those who walk always arrive at destinations”.We will adhere to the principle of seeking excellence while maintaining stability and making progress in excellence,proactively serve real economy,resolutely safeguard the bottom line of risks,and compr

100、ehensively improve management level,persist in the dynamically balanced development of“Quality,Efficiency and Scale”so as to bring stable return to investors in the long term.Looking ahead,the banking industry in China is seeing changes in trend.Given that the progress of interest rate liberalisatio

101、n and financing disintermediation has been accelerating,the extensive wealth management is in the ascendant and the integration of investment banking and commercial banking is gaining momentum,we must speed up the transformation to adapt to these trends and seize the opportunities.On the basis of fu

102、rther strengthening the result of retail banking strategy and light-model banking strategy,we take value creation bank as our strategic objective so as to maximize the comprehensive value of customers,employees,shareholders,partners and the society.We insist on promoting the coordinated development

103、of our four major sectors,namely retail finance,corporate finance,investment banking and financial markets,wealth management and asset management,strengthening our capital-heavy business,expanding our capital-light business and intensifying our existing advantages so as to create a new“Malik Curve”a

104、nd open up a new chapter of high-quality growth.China Merchants Bank Co.,Ltd.President and Chief Executive Officer24 March 2023China Merchants BankAnnual Report 2022(H share)12Presidents StatementXiong LiangjunChairman of the Board of SupervisorsChina Merchants BankAnnual Report 2022(H share)13Chapt

105、er I Company InformationCompany Information1.1 Company Profile1.1.1 Registered Company Name in Chinese:招商銀行股份有限公司(Abbreviated Name in Chinese:招商銀行)Registered Company Name in English:China Merchants Bank Co.,Ltd.1.1.2 Legal Representative:Miao JianminAuthorised Representatives:Wang Liang,Ho Wing Tsz

106、WendySecretary of the Board of Directors:Wang LiangJoint Company Secretaries:Wang Liang,Ho Wing Tsz WendySecurities Representative:Xia Yangfang1.1.3 Registered and Office Address:7088 Shennan Boulevard,Futian District,Shenzhen,Guangdong Province,China1.1.4 Contact Details:Address:7088 Shennan Boulev

107、ard,Futian District,Shenzhen,Guangdong Province,ChinaPostcode:518040Tel:+86 755 8319 8888Fax:+86 755 8319 5109E-mail:Website:Customer complaint hotline:95555-7Credit card complaint hotline:+86 400 820 5555-71.1.5 Principal Place of Business in Hong Kong:31/F,Three Exchange Square,8 Connaught Place,C

108、entral,Hong Kong,the PRC1.1.6 Share Listing:A Shares:Shanghai Stock ExchangeAbbreviated Name of A Shares:CMBStock Code:600036H Shares:SEHKAbbreviated Name of H Shares:CM BANKStock Code:03968Domestic Preference Shares:Shanghai Stock Exchange Abbreviated Name of Shares:Zhao Yin You 1(招銀優 1)Stock Code:

109、360028China Merchants BankAnnual Report 2022(H share)14Chapter I Company Information1.1.7 Domestic Auditor:Deloitte Touche Tohmatsu Certified Public Accountants LLP Office Address:30th Floor,Bund Centre,222 Yanan Road East,Shanghai,China Certified Public Accountants for Signature:Wu Lingzhi,Sun Weiq

110、iInternational Auditor:Deloitte Touche TohmatsuOffice Address:35th Floor,One Pacific Place,88 Queensway,Hong Kong,the PRC1.1.8 Legal Advisor as to PRC Law:JunHe LLP Legal Advisor as to Hong Kong Law:Herbert Smith Freehills1.1.9 Registrar for A Shares:China Securities Depository&Clearing Corporation

111、Ltd.,Shanghai Branch Address:188 South-Yanggao Road,Pudong New Area,Shanghai,the PRC Tel:+86 4008 058 058Share Register and Transfer Office as to H Shares:Computershare Hong Kong Investor Services Ltd.Address:Shops 1712-1716,17/F,Hopewell Centre,183 Queens Road East,Wanchai,Hong Kong,the PRCTel:+852

112、 2862 8555Registrar for Domestic Preference Shares:China Securities Depository&Clearing Corporation Ltd.,Shanghai Branch1.1.10 Newspapers and Websites Designated for Information Disclosure:The Chinese mainland:“China Securities Journal”(),“Securities Times”(),“Shanghai Securities News”()website of S

113、hanghai Stock Exchange()website of the Company()Hong Kong:website of Hong Kong Exchanges and Clearing Limited(.hk)website of the Company()Place for maintenance of periodic reports:Office of the Board of Directors of the Company1.2 Corporate Business OverviewFounded in 1987 with its Head Office in Sh

114、enzhen,China,the Company is a commercial bank with distinctive operating features and market influence in China.The Company mainly focuses on the market in China.The Companys branches primarily cover major cities in the Chinese mainland,as well as international financial centres such as Hong Kong,Ne

115、w York,London,Singapore,Luxembourg and Sydney.The Company was listed on Shanghai Stock Exchange in April 2002 and the SEHK in September 2006.The Company provides customers with various wholesale and retail banking products and services,and maintains treasury businesses for proprietary purpose and on

116、 behalf of customers.Many innovative products and services of the Company have been well received by the market.Retail banking services include the“All-in-one”multi-function debit card,credit card account and payment settlement services,classified wealth management services including the“Sunflower W

117、ealth Management”services and private banking services,retail credit services,CMB APP,CMB Life APP,“All-in-one Net”,a comprehensive online banking service platform,and other online services.Wholesale banking services include payment and settlement,wealth management,investment and financing and digit

118、al services,cash management,sci-tech finance,green finance,inclusive finance,supply chain finance and cross-border finance services,asset management,asset custody and investment banking.The Company continues to tap further into the living and business circles of customers to provide customers with c

119、ustomised,intelligent and comprehensive solutions for their supply chains and investment chains.The Company has continued to deepen its strategic transformation and come up with the strategic vision of“building the best value creation bank with innovation-driven development,leading model and disting

120、uished features”based on the internal and external situation and its own development.In line with the trend of steady advancement of Chinas common prosperity initiative underpinned by the transformation and upgrading of traditional industries and the development and growth of emerging industries,the

121、 Company actively serves the real economy,helps people realise their dreams for a better life,and strives to create more value for customers,employees,shareholders,partners and the society.Over the past year,the Company achieved fruitful results,unleashed innovation vitality,optimised and upgraded b

122、usiness model,steadily enhanced the three major capabilities in wealth management,Fintech and risk management,implemented ESG concept,further reinforced its core competitiveness.China Merchants BankAnnual Report 2022(H share)15Chapter I Company Information1.3 Development StrategiesStrategic vision:W

123、e are committed to building the best value creation bank with innovation-driven development,leading model and distinguished features.Strategic objectives:Building a value creation bank.In light of the advantages of retail banking which is less cyclically relevant,and the advantages of endogenous gro

124、wth of capital benefiting from the“Light-model Bank”,the Company upholds the philosophy of win-win business and business for common good to grow into a value creation bank.The Company manages to maximise the comprehensive value of customers,employees,shareholders,partners and the society,as well as

125、creating a new pattern of high-quality growth,aiming to become a world-class commercial bank.Core Value:Being customer-centric and creating values for customers.Strategic focus:Focusing on the building of three capacities of“wealth management,Fintech and risk management”,we promote the evolution of

126、organisational culture.Based on the needs of the country and enterprises and the ability of China Merchants Bank,we fully perform the ESG responsibilities,serve the real economy and meet the needs of peoples livelihood to create a new stage for high-quality growth.Expanding wealth management busines

127、s and accelerating the transformation of the business model.With a cyclic customer chain formed by the entire customer base,we will improve our customer service system featuring segmentation and classification-based management and build a customer structure that is in line with the social developmen

128、t and national economic transformation.With a product portfolio chain based on all our products,we will establish a service system of integrating investment banking and commercial banking,and strive to be the principal bank for settlement and wealth management,the principal bank and the first-inquir

129、y bank preferred by our customers.With the asset and capital organisation chain consolidated with the entire market as resources,we will combine internal and external efforts to enhance the systematisation of asset organisation,build all-market-oriented asset management capabilities,and strengthen t

130、he ability to circulate large amount of funds on and off balance sheet.With the goal of collaborative growth,we will build a regional development chain and promote multi-polarisation development to form a development landscape driven by both the whole bank integration and regional differentiation.Op

131、timising Fintech and accelerating comprehensive digital transformation.Focusing on online,data,intelligence,platform and ecology,we will comprehensively promote the digital reshaping of financial infrastructure and capability system,customers and channels,businesses and products,management and decis

132、ion-making,in order to provide a strong impetus for building a value creation bank.Strengthening risk management and building a fortress-style overall risk and compliance management system.Adhering to the prudent risk management concept,using Fintech as the tool,and taking a prudent risk appetite as

133、 a guarantee,we will create a“Six All”risk management system covering all customers,all assets,all risks,all institutions,all processes,and all factors to support operation of the value creation bank.Pursuing the core values and building the cultural and organisational foundation for a value creatio

134、n bank.Firstly,we will create a cultural system featuring openness,integration,equality and inclusiveness;secondly,we will establish an organising team for supporting our strategies and creating value together;thirdly,we will set up a social value system for the environment,society and governance.Ch

135、ina Merchants BankAnnual Report 2022(H share)16Chapter I Company Information1.4 Honors and AwardsIn 2022,the Company received a number of honors and awards from organisations both at home and abroad,including:On the list of“The Top 500 Banking Brands 2022”released by The Banker(UK)in February 2022,t

136、he Company ranked 10th with a brand value of USD24.370 billion.In February 2022,in the selection results of the“2022 Private Banking and Wealth Management Survey”released by Euromoney,the Company was once again awarded the“Best Private Bank/Wealth Manager Overall of PRC”,which also marked the Compan

137、ys 12th time to win such an award.In May 2022,in the selection results of the second Annual Sustainable Finance Awards 2022 released by the US-based Global Finance magazine,the Company won the Award for“Outstanding Leadership in Sustainability Transparency in the Asia-Pacific Region”.In June 2022,th

138、e Company was awarded the“Best Retail Bank in China”in“Asia Trailblazer Awards 2022”hosted by Retail Banker International.In June 2022,at the awards ceremony for the“2022 All-Asia Executive Team”held by the US-based Institutional Investor Magazine,the Company championed several awards,including“Hono

139、red Companies”,“Best IR Company”,and“Best ESG Company”.In July 2022,the Company ranked 11th,in terms of Tier 1 Capital,on the list of“Top 1,000 World Banks 2022”released by The Banker(UK),up 3 places in terms of ranking from the previous year and remaining in top 20 for five consecutive years.In Jul

140、y 2022,the Company received the award of“Best Bank in China”at the“2022 Awards for Excellence”ceremony staged by Euromoney for the fourth consecutive year,which marked the first“4 Consecutive Championships”in its awarding history.The list of Fortune Global 500 was officially released in August 2022,

141、on which the Company appeared for 11 consecutive years,ranking the 174th in terms of operating income.The results of“2022 International Excellence in Retail Financial Services Awards”announced by the Asian Banker Journal in August 2022,the Company was once again awarded“The Best Wealth Management Ba

142、nk in China”.In September 2022,in the latest rating of the“2022 Market Leaders”published by Euromoney,the Company received the highest ratings in four sectors,namely,corporate banking,corporate social responsibility(CSR),ESG and digital solutions.In September 2022,in the selection results of the“Glo

143、bal Finances 15th Annual China Star”awards released by the US-based Global Finance magazine,the Company was honored with four awards,namely,“The Best Transaction Service Bank”“The Best Corporate Social Responsibility Bank”“The Best Wealth Management Bank”and“The Best Sustainable Investment Private B

144、ank”.In December 2022,the Company won“Top Three Best Employers”,“Most Socially Responsible Employer”and“Most Admired Employer by Women”at the awards ceremony for the“Best Employer in China 2022”jointly organised by Z and Institute of Social Science Survey,Peking University.China Merchants BankAnnual

145、 Report 2022(H share)17Chapter II Summary of Accounting Data and Financial IndicatorsAddressing customerswide variety of needs is our top priorityChina Merchants BankAnnual Report 2022(H share)18Chapter II Summary of Accounting Data and Financial IndicatorsSummary of Accounting Data and Financial In

146、dicators2.1 Key Accounting Data and Financial Indicators(in millions of RMB,unless otherwise specified)20222021Changes+/-%Operating ResultsNet operating income(1)344,740331,4074.02Profit before tax165,113148,17311.43Net profit attributable to shareholders of the Bank138,012119,92215.08 Per Share(RMB

147、)Basic earnings attributable to ordinary shareholders of the Bank(2)5.264.6114.10Diluted earnings attributable to ordinary shareholders of the Bank5.264.6114.10 (in millions of RMB,unless otherwise specified)31 December202231 December2021Changes+/-%Volume IndicatorsTotal assets10,138,9129,249,0219.6

148、2 of which:total loans and advances to customers(3)6,051,4595,570,0348.64Total liabilities9,184,6748,383,3409.56 of which:total deposits from customers(3)7,535,7426,347,07818.73Total equity attributable to shareholders of the Bank945,503858,74510.10Net assets per share attributable to ordinary share

149、holders of the Bank(RMB)(2)32.7129.0112.75 Notes:(1)Net operating income is the sum of net interest income,net fee and commission income,other net income as well as share of profits of joint ventures and associates.(2)The Company issued non-cumulative preference shares in 2017,and issued perpetual b

150、onds in 2020 and 2021,all of which were classified as other equity instruments.In addition,the Company paid dividends on preference shares and interests on perpetual bonds in 2022.Therefore,when calculating the indicators such as basic earnings per share attributable to ordinary shareholders,return

151、on average equity attributable to ordinary shareholders and net assets per share attributable to ordinary shareholders,dividends on the preference shares and interests on perpetual bonds have been deducted from“net profit attributable to shareholders of the Bank”,while the preference shares and perp

152、etual bonds shall be deducted from both the“average equity”and the“net assets”.(3)Unless otherwise stated,the balance of the relevant financial instrument items herein and set out below exclude accrued interest.China Merchants BankAnnual Report 2022(H share)19Chapter II Summary of Accounting Data an

153、d Financial Indicators2.2 Financial Ratios(%)20222021Changes Profitability indicatorsReturn on average assets attributable to shareholders of the Bank1.421.36Increased by 0.06 percentage pointReturn on average equity attributable to ordinary shareholders of the Bank17.0616.96Increased by 0.10 percen

154、tage pointNet interest spread(1)2.282.39Decreased by 0.11 percentage pointNet interest margin(2)2.402.48Decreased by 0.08 percentage point As percentage of net operating income Net interest income63.3061.53Increased by 1.77 percentage points Net non-interest income36.7038.47Decreased by 1.77 percent

155、age pointsCost-to-income ratio(3)32.8933.11Decreased by 0.22 percentage point (%)31 December202231 December2021Changes over2021 year-end Capital adequacy indicators under the Advanced Measurement Approach(4)Core Tier 1 capital adequacy ratio13.6812.66Increased by 1.02 percentage pointsTier 1 capital

156、 adequacy ratio15.7514.94Increased by 0.81 percentage pointCapital adequacy ratio17.7717.48Increased by 0.29 percentage pointEquity to total assets9.419.36Increased by 0.05 percentage point Asset quality indicatorsNon-performing loan ratio0.960.91Increased by 0.05 percentage pointAllowance coverage

157、ratio(5)450.79483.87Decreased by 33.08 percentage pointsAllowance-to-loan ratio(6)4.324.42Decreased by 0.10 percentage point 20222021Changes Credit cost ratio(7)0.780.70Increased by 0.08 percentage point Notes:(1)Net interest spread=average yield of the total interest-earning assets average cost rat

158、io of total interest-bearing liabilities.(2)Net interest margin=net interest income/average balance of total interest-earning assets.(3)Cost-to-income ratio=operating expenses/net operating income.The numerator does not include taxes and surcharges,provisions for insurance claims and the depreciatio

159、n charges on fixed assets under operating lease and investment properties and others.(4)As at the end of the reporting period,the Groups Core Tier 1 capital adequacy ratio,Tier 1 capital adequacy ratio and capital adequacy ratio under the Weighted Approach were 11.52%,13.25%and 14.68%respectively.(5

160、)Allowance coverage ratio=allowances for impairment losses/balance of non-performing loans.(6)Allowance-to-loan ratio=allowances for impairment losses/total loans and advances to customers.(7)Credit cost ratio=expected credit losses of loans and advances to customers/the average of total loans and a

161、dvances to customers 100%,the average of total loans and advances to customers=(total loans and advances to customers at the beginning of the period+total loans and advances to customers at the end of the period)/2.China Merchants BankAnnual Report 2022(H share)20Chapter II Summary of Accounting Dat

162、a and Financial Indicators2.3 Five-year Financial Summary(in millions of RMB)20222021202020192018 Results for the yearNet operating income344,740331,407290,279269,788248,444Operating expenses122,061116,879102,81491,49781,110Impairment losses57,56666,35565,02561,15960,837Profit before tax165,113148,1

163、73122,440117,132106,497Net profit attributable to shareholders of the Bank138,012119,92297,34292,86780,560 (RMB)Per ShareDividend(tax inclusive)1.7381.5221.2531.200.94Basic earnings attributable to ordinary shareholders of the Bank5.264.613.793.623.13Diluted earnings attributable to ordinary shareho

164、lders of the Bank5.264.613.793.623.13Year-end net assets attributable to ordinary shareholders of the Bank32.7129.0125.3622.8920.07 (in millions of RMB)Year endShare capital25,22025,22025,22025,22025,220Total shareholders equity954,238865,681730,354617,707543,605Total liabilities9,184,6748,383,3407,

165、631,0946,799,5336,202,124Deposits from customers7,535,7426,347,0785,628,3364,844,4224,400,674Total assets10,138,9129,249,0218,361,4487,417,2406,745,729Total loans and advances to customers6,051,4595,570,0345,029,1284,490,6503,933,034 (%)Key Financial RatiosReturn on average assets attributable to sh

166、areholders of the Bank1.421.361.231.311.24Return on average equity attributable to ordinary shareholders of the Bank17.0616.9615.7316.8416.57Cost-to-income ratio32.8933.1133.3332.0831.04Non-performing loan ratio0.960.911.071.161.36Credit cost ratio0.780.700.981.291.58Core Tier 1 capital adequacy rat

167、io under the Advanced Measurement Approach13.6812.6612.2911.9511.78Tier 1 capital adequacy ratio under the Advanced Measurement Approach15.7514.9413.9812.6912.62Capital adequacy ratio under the Advanced Measurement Approach17.7717.4816.5415.5415.68 China Merchants BankAnnual Report 2022(H share)21Ch

168、apter II Summary of Accounting Data and Financial IndicatorsTechnology boosts service efficiency without compromising our service standardsChina Merchants BankAnnual Report 2022(H share)22Chapter III Management Discussion and AnalysisManagement Discussion and Analysis3.1 Analysis of Overall Operatio

169、nIn 2022,adhering to the philosophy of achieving dynamically balanced development of“Quality,Efficiency and Scale”,the Group carried out various businesses in a sound manner,whereby the scale of assets and liabilities and net profit have grown steadily,and the asset quality has been generally stable

170、.During the reporting period,the Group realised the net operating income of RMB344.740 billion,representing a year-on-year increase of 4.02%;realised a net profit attributable to shareholders of the Bank of RMB138.012 billion,representing a year-on-year increase of 15.08%;realised the net interest i

171、ncome of RMB218.235 billion,representing a year-on-year increase of 7.02%;and realised the net non-interest income of RMB126.505 billion,representing a year-on-year decrease of 0.77%.The return on average asset(ROAA)attributable to shareholders of the Bank and return on average equity(ROAE)attributa

172、ble to ordinary shareholders of the Bank were 1.42%and 17.06%,up by 0.06 percentage point and 0.10 percentage point year-on-year,respectively.As at the end of the reporting period,the Groups total assets amounted to RMB10,138.912 billion,representing an increase of 9.62%as compared with the end of t

173、he previous year.The total loans and advances to customers amounted to RMB6,051.459 billion,representing an increase of 8.64%as compared with the end of the previous year.Total liabilities amounted to RMB9,184.674 billion,representing an increase of 9.56%as compared with the end of the previous year

174、.Total deposits from customers amounted to RMB7,535.742 billion,representing an increase of 18.73%as compared with the end of the previous year.As at the end of the reporting period,the Group had a total of non-performing loans of RMB58.004 billion,representing an increase of RMB7.142 billion as com

175、pared with the end of the previous year.The non-performing loan ratio was 0.96%,representing an increase of 0.05 percentage point as compared with the end of the previous year.The allowance coverage ratio was 450.79%,representing a decrease of 33.08 percentage points as compared with the end of the

176、previous year;the allowance-to-loan ratio was 4.32%,representing a decrease of 0.10 percentage point as compared with the end of the previous year.3.2 Analysis of Income Statement3.2.1 Financial highlightsDuring the reporting period,the Group realised a profit before tax of RMB165.113 billion,repres

177、enting a year-on-year increase of 11.43%.The effective income tax rate was 15.64%,representing a year-on-year decrease of 2.81 percentage points.The following table sets out the changes in major income/loss items of the Group during the reporting period.(in millions of RMB)20222021Changes Net intere

178、st income218,235203,91914,316Net fee and commission income94,27594,447(172)Other net income29,70529,011694Operating expenses(122,061)(116,879)(5,182)Expected credit losses(56,751)(65,962)9,211Impairment losses on other assets(815)(393)(422)Share of profits of joint ventures and associates2,5254,030(

179、1,505)Profit before tax165,113148,17316,940Income tax(25,819)(27,339)1,520Net profit139,294120,83418,460Net profit attributable to shareholders of the Bank138,012119,92218,090 China Merchants BankAnnual Report 2022(H share)23Chapter III Management Discussion and Analysis3.2.2 Net operating incomeDur

180、ing the reporting period,the Group realised net operating income of RMB344.740 billion,representing a year-on-year increase of 4.02%,of which net interest income accounted for 63.30%and net non-interest income accounted for 36.70%with a year-on-year decrease of 1.77 percentage points in terms of sha

181、re of the net non-interest income in net operating income.3.2.3 Interest incomeDuring the reporting period,the Group recorded an interest income of RMB353.380 billion,representing a year-on-year increase of 8.05%,mainly due to the increase in interest-earning assets.Interest income from loans and ad

182、vances to customers continued to be the largest component of the interest income of the Group.Interest income from loans and advances to customersDuring the reporting period,the interest income from loans and advances to customers of the Group was RMB265.601 billion,representing a year-on-year incre

183、ase of 5.96%.The following table sets forth the average balance(daily average balance,same as below),interest income and average yield of each component of loans and advances to customers of the Group for the periods indicated.20222021 (in millions of RMB,except for percentages)AveragebalanceInteres

184、tincomeAverageyield(%)AveragebalanceInterestincomeAverageyield(%)Corporate loans2,250,66286,7543.852,095,66480,5753.84Retail loans3,089,371168,1745.442,869,358159,1245.55Discounted bills510,24210,6732.09399,17310,9632.75 Loans and advances to customers5,850,275265,6014.545,364,195250,6624.67 During

185、the reporting period,from the perspective of the maturity structure of loans and advances to customers of the Group,the average balance of short-term loans was RMB2,184.862 billion with the interest income amounting to RMB105.009 billion,and the average yield reached 4.81%;the average balance of med

186、ium-to-long term loans was RMB3,665.413 billion with the interest income amounting to RMB160.592 billion,and the average yield reached 4.38%.The average yield of short-term loans was higher than that of medium-to-long term loans,which was mainly attributable to the higher yield of credit card loans

187、and micro-finance loans in short-term loans and the higher proportion thereof.Interest income from investmentsDuring the reporting period,the interest income from investments of the Group was RMB65.808 billion,representing a year-on-year increase of 17.39%.The average yield of investments was 3.24%,

188、representing a year-on-year decrease of 11 basis points,which was mainly attributable to the cumulative impact of the downward market interest rates in recent years.Interest income from balances and placements with banks and other financial institutionsDuring the reporting period,the interest income

189、 of the Group from balances and placements with banks and other financial institutions was RMB13.489 billion,representing a year-on-year increase of 7.54%,and the average yield of balances and placements with banks and other financial institutions was 2.09%,representing a year-on-year increase of 16

190、 basis points,which was primarily attributable to the year-on-year increase in yield of balances and placements with banks and other financial institutions denominated in foreign currencies because of the effect of the continuous rate hikes by the Federal Reserve.China Merchants BankAnnual Report 20

191、22(H share)24Chapter III Management Discussion and Analysis3.2.4 Interest expenseDuring the reporting period,the interest expense of the Group was RMB135.145 billion,representing a year-on-year increase of 9.75%,mainly due to the increase in interest expense on deposits from customers.Interest expen

192、se on deposits from customersDuring the reporting period,the Groups interest expense on deposits from customers was RMB105.836 billion,representing a year-on-year increase of 25.50%,mainly due to the sustained rapid growth of deposits from customers as well as the increase in the cost ratio of depos

193、its.The following table sets forth the average balances,interest expense and average cost ratios of the deposits from corporate and retail customers of the Group for the periods indicated.20222021 (in millions of RMB,except for percentages)AveragebalanceInterestexpenseAveragecost ratio(%)Averagebala

194、nceInterestexpenseAveragecost ratio(%)Deposits from corporate customersDemand2,631,38927,7491.052,396,80221,8730.91Time1,755,39446,6982.661,485,64039,8542.68 Subtotal4,386,78374,4471.703,882,44261,7271.59 Deposits from retail customersDemand1,655,0886,0730.371,453,3785,1100.35Time913,78625,3162.7763

195、7,65317,4952.74 Subtotal2,568,87431,3891.222,091,03122,6051.08 Total6,955,657105,8361.525,973,47384,3321.41 Interest expense on deposits and placements from banks and other financial institutionsDuring the reporting period,the interest expense on deposits and placements from banks and other financia

196、l institutions of the Group amounted to RMB16.309 billion,representing a year-on-year decrease of 9.81%,which was primarily due to the sound growth in deposits from customers and the decrease in demand for deposits and placements from banks and other financial institutions as well as the decline in

197、cost ratios.Interest expense on debt securities issuedDuring the reporting period,the interest expense on debt securities issued of the Group amounted to RMB9.662 billion,representing a year-on-year decrease of 22.90%,which was mainly due to the decrease in both daily average scale and cost ratio of

198、 interbank certificates of deposits issued.China Merchants BankAnnual Report 2022(H share)25Chapter III Management Discussion and Analysis3.2.5 Net interest incomeDuring the reporting period,the Groups net interest income amounted to RMB218.235 billion,representing a year-on-year increase of 7.02%.T

199、he following table sets out the average balances,interest income/interest expense and average yield/cost ratio of assets and liabilities of the Group for the periods indicated.20222021 (in millions of RMB,except for percentages)AveragebalanceInterestincomeAverageyield(%)AveragebalanceInterestincomeA

200、verageyield(%)Interest-earning assetsLoans and advances to customers5,850,275265,6014.545,364,195250,6624.67Investments2,029,57865,8083.241,672,59456,0593.35Balances with the central bank557,0318,4821.52533,8637,7921.46Balances and placements with banks and other financial institutions644,93813,4892

201、.09649,04612,5431.93 Total9,081,822353,3803.898,219,698327,0563.98 (in millions of RMB,except for percentages)AveragebalanceInterestexpenseAveragecost ratio(%)AveragebalanceInterestexpenseAveragecost ratio(%)Interest-bearing liabilitiesDeposits from customers6,955,657105,8361.525,973,47384,3321.41De

202、posits and placements from banks and other financial institutions996,81916,3091.641,076,61818,0831.68Debt securities issued322,7849,6622.99410,71112,5323.05Borrowings from the central bank122,1942,8282.31276,7737,6352.76Lease liabilities13,4085103.8013,9775553.97 Total8,410,862135,1451.617,751,55212

203、3,1371.59 Net interest income/218,235/203,919/Net interest spread/2.28/2.39Net interest margin/2.40/2.48 During the reporting period,the average yield of our interest-earning assets of the Group was 3.89%,representing a year-on-year decrease of 9 basis points;the average cost ratio of our interest-b

204、earing liabilities was 1.61%,representing a year-on-year increase of 2 basis points;the net interest spread was 2.28%,representing a year-on-year decrease of 11 basis points and the net interest margin was 2.40%,representing a year-on-year decrease of 8 basis points.For the analysis of the reasons b

205、ehind the decrease in the net interest margin,please refer to 3.9.1“Net interest margin”in this Chapter.China Merchants BankAnnual Report 2022(H share)26Chapter III Management Discussion and AnalysisThe following table sets forth the breakdown of changes in interest income and interest expense due t

206、o changes in volumes and interest rates of the Group for the periods indicated.Changes in volume were measured by changes in average balances,while changes in interest rates were measured by changes in the average interest rates;the changes in interest income and interest expense due to changes in b

207、oth volumes and interest rates have been included in the amount of changes in interest income and interest expense due to changes in volume.2022 compared to 2021 Increase(decrease)due toNet increase(decrease)(in millions of RMB)VolumeInterest rate Interest-earning assetsLoans and advances to custome

208、rs21,912(6,973)14,939Investments11,589(1,840)9,749Balances with the central bank370320690Balances and placements with banks and other financial institutions(92)1,038946 Changes in interest income33,779(7,455)26,324 Interest-bearing liabilitiesDeposits from customers14,9336,57121,504Deposits and plac

209、ements from banks and other financial institutions(1,343)(431)(1,774)Debt securities issued(2,624)(246)(2,870)Borrowings from the central bank(3,562)(1,245)(4,807)Lease liabilities(21)(24)(45)Changes in interest expense7,3834,62512,008 Changes in net interest income26,396(12,080)14,316 The following

210、 table sets out the average balances,interest income/interest expense and annualised average yield/cost ratio of assets and liabilities of the Group for the periods indicated.October to December 2022July to September 2022 (in millions of RMB,except for percentages)AveragebalanceInterestincomeAnnuali

211、sedaverageyield(%)AveragebalanceInterestincomeAnnualisedaverageyield(%)Interest-earning assetsLoans and advances to customers6,004,65567,4854.465,928,30366,9124.48Investments2,209,14918,0443.242,067,35016,7423.21Balances with the central bank561,0512,2891.62548,7792,1701.57Balances and placements wi

212、th banks and other financial institutions601,9403,7712.49604,7113,1062.04 Total9,376,79591,5893.889,149,14388,9303.86 (in millions of RMB,except for percentages)AveragebalanceInterestexpenseAnnualisedaveragecost ratio(%)AveragebalanceInterestexpenseAnnualisedaveragecost ratio(%)Interest-bearing liab

213、ilitiesDeposits from customers7,292,63328,4851.557,081,70127,5601.54Deposits and placements from banks and other financial institutions1,008,0864,3951.73990,6873,9541.58Debt securities issued236,0361,8413.09279,9472,1763.08Borrowings from the central bank118,6816562.19113,8306742.35Lease liabilities

214、12,9251073.2813,3701283.80 Total8,668,36135,4841.628,479,53534,4921.61 Net interest income/56,105/54,438/Net interest spread/2.26/2.25Net interest margin/2.37/2.36 In the fourth quarter of 2022,the net interest margin of the Group was 2.37%and its net interest spread was 2.26%,representing an increa

215、se of 1 basis point,as compared to the previous quarter.China Merchants BankAnnual Report 2022(H share)27Chapter III Management Discussion and Analysis3.2.6 Net non-interest incomeDuring the reporting period,the Group recorded a net non-interest income of RMB126.505 billion,representing a year-on-ye

216、ar decrease of 0.77%.The components are as follows:Net fee and commission income amounted to RMB94.275 billion,representing a year-on-year decrease of 0.18%.Among the fee and commission income,fee and commission income from wealth management amounted to RMB30.903 billion,representing a year-on-year

217、decrease of 14.28%;fee and commission income from asset management amounted to RMB12.457 billion,representing a year-on-year increase of 14.75%;income from bank card fees amounted to RMB21.399 billion,representing a year-on-year increase of 10.44%;income from settlement and clearing fees amounted to

218、 RMB15.051 billion,representing a year-on-year increase of 8.26%;commission income from credit commitment and loan business amounted to RMB5.753 billion,representing a year-on-year decrease of 8.99%;commission income from custody businesses amounted to RMB5.791 billion,representing a year-on-year in

219、crease of 6.59%;and income from others amounted to RMB12.018 billion,representing a year-on-year increase of 15.82%.For analysis of the main reasons for changes in fee and commission income,please refer to“Net non-interest income”in 3.9.2 under this chapter.Other net non-interest income amounted to

220、RMB32.230 billion,representing a year-on-year decrease of 2.45%,of which net investment income amounted to RMB18.013 billion,representing a year-on-year increase of 1.07%,which was mainly due to the increase in spread income of transactions in the financial markets;net profit or loss from changes in

221、 fair value amounted to RMB-2.675 billion,representing a year-on-year decrease of RMB2.767 billion,mainly due to the decrease in fair value of bond investment and non-monetary fund investment;the net exchange gain amounted to RMB3.600 billion,representing a year-on-year increase of 7.43%,mainly due

222、to the increase in exchange gains arising from the foreign currency-denominated monetary items;and other net income amounted to RMB10.767 billion,representing a year-on-year increase of 39.00%,mainly due to the increase in income generated from operating leasing business of CMB Financial Leasing,whi

223、ch amounted to RMB8.785 billion.In terms of business segments,the net non-interest income from retail finance amounted to RMB60.026 billion,representing a year-on-year decrease of 3.45%and accounting for 47.45%of the Groups net non-interest income;the net non-interest income from wholesale finance a

224、mounted to RMB51.635 billion3,representing a year-on-year decrease of 1.40%and accounting for 40.82%of the Groups net non-interest income;the net non-interest income from other businesses amounted to RMB14.844 billion,representing a year-on-year increase of 14.67%and accounting for 11.73%of the Grou

225、ps net non-interest income.(in millions of RMB,except for percentages)20222021Changes+/-%Fee and commission income(note)103,372102,3181.03Fees and commissions from wealth management30,90336,053-14.28Fees and commissions from asset management12,45710,85614.75Bank card fees21,39919,37710.44Settlement

226、and clearing fees15,05113,9028.26Commissions from credit commitment and loan business5,7536,321-8.99Commissions from custody businesses5,7915,4336.59Others12,01810,37615.82Fee and commission expense(9,097)(7,871)15.58 Net fee and commission income94,27594,447-0.18Other net non-interest income32,2303

227、3,041-2.45Other net income29,70529,0112.39Net investment income18,01317,8221.07Net profit/(loss)from fair value change(2,675)92N/ANet exchange gain3,6003,3517.43Other net income10,7677,74639.00Share of profits of joint ventures and associates2,5254,030-37.34 Total net non-interest income126,505127,4

228、88-0.77 Note:Fees and commissions from wealth management include income from agency distribution of funds,income from agency distribution of insurance policies,income from agency distribution of trust schemes,income from agency sales of wealth management services,income from securities brokerage and

229、 income from agency distribution of precious metals.Fees and commissions from asset management mainly include the income from the issuance and management of various asset management products such as funds,wealth management and asset management plans of our subsidiaries,China Merchants Fund,CMB Inter

230、national Capital,CMB Wealth Management and CIGNA&CMAM.Commissions from custody businesses include income from basic asset custody services and value-added services.Others mainly include income from underwriting of debt and equity,income from service fees from securitisation of credit assets,income f

231、rom consultancy and advisory services and income from other intermediate businesses.In 2022,the Group optimised the disclosure calibre of the breakdown items of“fees and commissions from wealth management”and“others”,and adjusted the comparative data of the previous year in accordance with the same

232、calibre.3 Since 2022,the Group has adjusted CMB Financial Leasing to the wholesale finance business segment from other business segments,resulting in the adjustment to the comparative figures of the corresponding period of the previous year.China Merchants BankAnnual Report 2022(H share)28Chapter II

233、I Management Discussion and Analysis3.2.7 Operating expensesDuring the reporting period,the Groups operating expenses amounted to RMB122.061 billion,representing a year-on-year increase of 4.43%,among which staff costs amounted to RMB70.657 billion,representing a year-on-year increase of 7.01%.Other

234、 operating expenses4 amounted to RMB51.404 billion,representing a year-on-year increase of 1.09%.With the goal of shaping the Bank into“the Best Fintech Bank“,the Group has maintained the scale of investment in Fintech development by continuously consolidating its technological foundation and accele

235、rating the pace of digital transformation.At the same time,the Group adheres to cost refinement management.On the one hand,it continues to promote the transformation of scientific and technological innovation into productivity while strengthening the monitoring and control of input and output;on the

236、 other hand,by proactively optimising expenses,the Group has cut back on venue operating costs,streamlined daily expenses,and refined the allocation of expenses and resources so as to continuously improve cost efficiency.The cost-to-income ratio of the Group during the reporting period was 32.89%,re

237、presenting a decrease of 0.22 percentage point as compared with the previous year.The following table sets forth,for the periods indicated,the principal components of the operating expenses of the Group.(in millions of RMB)20222021 Staff costs70,65766,028Depreciation,amortisation and rental expenses

238、15,72014,519Other general and administrative expenses32,31933,249Allowances for insurance claims360311Taxes and surcharges3,0052,772 Total operating expenses122,061116,879 3.2.8 Expected credit lossesDuring the reporting period,the expected credit losses of the Group were RMB56.751 billion,represent

239、ing a year-on-year decrease of 13.96%.The following table sets forth,for the periods indicated,the principal components of expected credit losses of the Group.(in millions of RMB)20222021 Loans and advances to customers45,15737,020Financial investments3,87915,848Amounts due from banks and other fina

240、ncial institutions(3,284)6,110Expected credit losses relating to financial guarantees and loan commitments7,1125,639Others3,8871,345 Total expected credit losses56,75165,962 The Group adopted the Financial Instruments Standards to prudently make allowances for credit risk losses while consistently c

241、onsolidating the capability to offset risks in key areas by using the expected credit loss model and the risk quantification parameters such as the probability of customer defaults and the loss given defaults,after taking into consideration the adjustments in macro perceptiveness.During the reportin

242、g period,expected credit losses of loans and advances to customers of the Group were RMB45.157 billion,representing a year-on-year increase of RMB8.137 billion,which was mainly attributable to the additional allowances for expected credit risk losses on loans made by the Group after taking into acco

243、unt the slowdown in economic growth and further release of real estate customer risks;expected credit losses relating to financial investment was RMB3.879 billion,representing a year-on-year decrease of RMB11.969 billion,which was mainly due to the decrease of the allowances recognised during the re

244、porting period as compared with the corresponding period of the previous year based on the specific credit risk profile during the reporting period and the previous allowance basis;expected credit losses relating to the amounts due from banks and other financial institutions amounted to RMB-3.284 bi

245、llion,representing a year-on-year decrease of RMB9.394 billion,which was mainly due to,on the one hand,the significant decrease in the size of the amounts purchased under resale agreements as compared with the end of the previous year,which reversed the allowances for credit risk losses,on the other

246、 hand,relative stability of the asset quality of interbank financing business,resulting in reversal of partial allowances for credit risk losses based on their actual risk profiles during the reporting period.Other expected credit losses amounted to RMB3.887 billion,representing a year-on-year incre

247、ase of RMB2.542 billion,which was mainly due to the prudent allowances for credit risk losses on lease receivable,fees receivable and other receivables during the reporting period.4 Other operating expenses include depreciation,amortisation,leases,taxes and surcharges,allowances for insurance claims

248、 and various other administrative expenses.China Merchants BankAnnual Report 2022(H share)29Chapter III Management Discussion and Analysis3.3 Analysis of Balance Sheet3.3.1 AssetsAs at the end of the reporting period,the total assets of the Group amounted to RMB10,138.912 billion,up by 9.62%from the

249、 end of the previous year,which was mainly attributable to the increase in loans and advances to customers and bond investments of the Group.The following table sets forth,as at the dates indicated,the components of the total assets of the Group.To maintain the figures comparable,the financial instr

250、uments in section“3.3.1 Assets”were still analysed on the statistical calibre excluding interest receivable,except for the following table,in which interest receivable calculated using the effective interest method was included.31 December 202231 December 2021 (in millions of RMB,except for percenta

251、ges)AmountPercentage ofthe total amount(%)AmountPercentage ofthe total amount(%)Total loans and advances to customers6,062,91359.805,580,88560.34Allowances for impairment losses on loans(255,759)(2.52)(245,494)(2.65)Net loans and advances to customers5,807,15457.285,335,39157.69Investment securities

252、 and other financial assets2,815,20427.772,224,04124.05Cash,precious metals and balances with the central bank605,9895.98571,8476.18Inter-bank transactions(1)631,5986.23799,3728.64Goodwill9,9990.109,9540.11Other assets(2)268,9682.64308,4163.33 Total assets10,138,912100.009,249,021100.00 Notes:(1)Inc

253、luding deposits and placements with banks and other financial institutions and amounts held under resale agreements.(2)Including fixed assets,right-of-use assets,intangible assets,investment properties,deferred tax assets and other assets.3.3.1.1 Loans and advances to customersAs at the end of the r

254、eporting period,total loans and advances to customers of the Group amounted to RMB6,051.459 billion,representing an increase of 8.64%as compared with the end of the previous year;total loans and advances to customers accounted for 59.69%of the total assets,representing a decrease of 0.53 percentage

255、point as compared with the end of the previous year.For details of the loans and advances to customers of the Group,please refer to 3.4“Analysis of Loan Quality”in this chapter.China Merchants BankAnnual Report 2022(H share)30Chapter III Management Discussion and Analysis3.3.1.2 Investment securitie

256、s and other financial assetsThe Groups investment securities and other financial assets consist of listed and unlisted financial instruments denominated in RMB and foreign currencies.The following table sets forth the components of investment securities and other financial assets of the Group by lin

257、e items.31 December 202231 December 2021 (in millions of RMB,except for percentages)AmountPercentage of the total amount(%)AmountPercentage of the total amount(%)Derivative financial assets18,6710.6723,3901.06Financial investments at fair value through profit or loss423,46715.19348,12315.82 Bond inv

258、estments215,0817.72176,7648.03 Others(note)208,3867.47171,3597.79Debt investments at amortised cost1,536,39755.131,169,65253.16 Bond investments1,452,49952.121,078,88849.03 Non-standardised credit asset investments126,6984.55129,8515.90 Others6480.026200.03 Less:allowances for impairment losses(43,4

259、48)(1.56)(39,707)(1.80)Debt investments at fair value through other comprehensive income771,27127.67628,35528.56Equity investments designated at fair value through other comprehensive income13,4160.486,9950.32Investments in joint ventures and associates23,8440.8623,6541.08 Total investment securitie

260、s and other financial assets2,787,066100.002,200,169100.00 Note:Including equity investments,investments in funds,wealth management products,long position in precious metal contracts and others.Derivative financial instrumentsAs at the end of the reporting period,the major categories and amount of d

261、erivative financial instruments held by the Group are indicated in the following table.For details,please refer to Note 60(f)to the financial statements.31 December 202231 December 2021 Fair valueFair value(in millions of RMB)NotionalamountAssetsLiabilitiesNotionalamountAssetsLiabilities Interest ra

262、te derivatives1,543,2376,428(6,109)2,641,84611,877(11,991)Currency derivatives874,23011,376(11,671)1,186,03010,041(14,054)Other derivatives92,258867(856)139,9311,472(1,237)Total2,509,72518,671(18,636)3,967,80723,390(27,282)The above table shows the notional amount and fair value of the Groups deriva

263、tive financial instruments by their remaining maturity on each balance sheet date.The notional amount refers only to the transaction volumes that have not yet been due or completed on the balance sheet date,and does not represent the value at risk.During the reporting period,the two-way fluctuation

264、of RMB exchange rate increased and the interest-rate derivatives market generally showed a range-bound feature.As an integrated market maker in the interbank RMB and foreign exchange market and a quote provider for derivatives in the local currency market,the Group was committed to improving the eff

265、ectiveness of pricing for derivatives and proactively providing liquidity to the market.Meanwhile,by continuously leveraging its professional advantages in financial market derivative transactions,the Group kept up its effort in publicising the exchange rate risk-neutral management concept and metho

266、d,helping customers carry out hedging transactions,and managing various market risks,as a result of which the number of customers served and transaction volumes continued to grow.China Merchants BankAnnual Report 2022(H share)31Chapter III Management Discussion and AnalysisFinancial investments at f

267、air value through profit or lossAs at the end of the reporting period,the balance of the financial investments at fair value through profit or loss of the Group amounted to RMB423.467 billion,with bond and fund investments etc.being the major categories.The investments were made by the Group based o

268、n assessments of,among other factors,macroeconomic,monetary and fiscal policies,industrial policies and market supply and demand,so as to obtain investment income by capturing trading opportunities in the market.During the reporting period,funding was stable in general,bond yields fell,and interest

269、rates rebounded at the end of the year.The Group aggressively increased its positions in high-coupon short-and medium-term PRC government bonds,and took profit at the end of the third quarter,achieving substantial returns.For details,please refer to Note 23(a)to the financial statements.Debt investm

270、ents at amortised costAs at the end of the reporting period,the balance of the Groups debt investments at amortised cost amounted to RMB1,536.397 billion.Among them,the bond investments mainly involved bonds issued by the PRC government and policy banks.This type of investment was held on a long-ter

271、m basis for the strategic allocation of assets and liabilities of the Group,based on the requirements of interest rate risk management of banking books and liquidity management,while taking into account returns and risks.For details,please refer to Note 23(b)to the financial statements.Debt investme

272、nts at fair value through other comprehensive incomeAs at the end of the reporting period,the balance of debt investments at fair value through other comprehensive income of the Group amounted to RMB771.271 billion,with interest rate bonds such as PRC government bonds and policy bank bonds and mediu

273、m-to-high rating quality debenture bonds being the major categories.This type of investment was made by the Group based on research and analysis on the bond market,with the purpose of obtaining investment return by capturing investment and allocation opportunities in the market and constantly optimi

274、sing asset allocation structure.For details,please refer to Note 23(c)to the financial statements.Equity investments designated at fair value through other comprehensive incomeAs at the end of the reporting period,the balance of equity investments designated at fair value through other comprehensive

275、 income of the Group amounted to RMB13.416 billion.Such investments were mainly non-trading equity investments held by the Group in the investees over whom the Group had no control,joint control or significant influence.For details,please refer to Note 23(d)to the financial statements.The compositio

276、n of the Groups total bond investments classified by the issuing entities(in millions of RMB)31 December 202231 December 2021 Official authorities1,600,2741,205,718Policy banks494,628390,387Commercial banks and other financial institutions232,923168,483Others111,026119,419 Total bond investments2,43

277、8,8511,884,007 Note:“Official authorities”include the Ministry of Finance of the PRC,local governments and the Central Bank,etc.;“Others”mainly refer to enterprises.Investments in joint ventures and associatesAs at the end of the reporting period,the Groups investments in joint ventures and associat

278、es amounted to RMB23.844 billion,up 0.80%from the end of the previous year.As at the end of the reporting period,the balance of allowances for impairment losses on investments in joint ventures and associates of the Group was zero.For details,please refer to Note 25 and Note 26 to the financial stat

279、ements.3.3.1.3 GoodwillIn compliance with the International Accounting Standards,at the end of the reporting period,the Group conducted an impairment test on the goodwill arising from the acquisition of CMB Wing Lung Bank,China Merchants Fund and other companies and determined that provision for imp

280、airment was not necessary for the reporting period.As at the end of the reporting period,the Group had a balance of allowances for impairment losses on goodwill of RMB579 million and the carrying value of goodwill was RMB9.999 billion.China Merchants BankAnnual Report 2022(H share)32Chapter III Mana

281、gement Discussion and Analysis3.3.2 LiabilitiesAs at the end of the reporting period,the total liabilities of the Group amounted to RMB9,184.674 billion,representing an increase of 9.56%as compared with the end of the previous year,which was primarily attributable to the faster growth in deposits fr

282、om customers.The following table sets forth,as at the dates indicated,the components of the total liabilities of the Group.To maintain the figures comparable,the financial instruments in section“3.3.2 Liabilities”were still analysed on the statistical calibre excluding interest payable,except for th

283、e following table,in which interest payable calculated using the effective interest method was included.31 December 202231 December 2021 (in millions of RMB,except for percentages)AmountPercentage of the total amount(%)AmountPercentage of the totalamount(%)Deposits from customers7,590,57982.646,385,

284、15476.16Inter-bank transactions(1)945,62410.301,081,32812.90Borrowings from the central bank129,7451.41159,9871.91Financial liabilities at fair value through profit or loss and derivative financial liabilities81,9500.8991,0431.09Debt securities issued223,8212.44446,6455.33Others(2)212,9552.32219,183

285、2.61 Total liabilities9,184,674100.008,383,340100.00 Notes:(1)Including deposits and placements from banks and other financial institutions and amounts sold under repurchase agreements.(2)Including salaries and welfare payable,taxes payable,contract liabilities,lease liabilities,expected liabilities

286、,deferred income tax liabilities and other liabilities.Deposits from customersAs at the end of the reporting period,total deposits from customers of the Group amounted to RMB7,535.742 billion,representing an increase of 18.73%as compared with the end of the previous year.Deposits from customers,acco

287、unting for 82.05%of the total liabilities of the Group,were the major funding source of the Group.The following table sets forth,as at the dates indicated,the deposits from customers of the Group by product type and customer type.31 December 202231 December 2021 (in millions of RMB,except for percen

288、tages)AmountPercentage of the totalamount(%)AmountPercentage of the totalamount(%)Corporate customer depositsDemand2,762,67136.662,652,81741.80Time1,668,88222.151,406,10722.15 Subtotal4,431,55358.814,058,92463.95 Deposits from retail customersDemand1,983,36426.321,557,86124.54Time1,120,82514.87730,2

289、9311.51 Subtotal3,104,18941.192,288,15436.05 Total deposits from customers7,535,742100.006,347,078100.00 In 2022,the percentage of daily average balance of the demand deposits to that of the total deposits from customers of the Group was 61.63%,representing a year-on-year decrease of 2.82 percentage

290、 points.Among these,the daily average balance of corporate demand deposits accounted for 59.98%of that of the corporate deposits,representing a year-on-year decrease of 1.75 percentage points;the daily average balance of retail demand deposits accounted for 64.43%of that of the retail deposits,repre

291、senting a year-on-year decrease of 5.08 percentage points.Affected by the volatility of the capital market,customers increased investments in time deposit products,leading to a decrease in the percentage of demand deposits.China Merchants BankAnnual Report 2022(H share)33Chapter III Management Discu

292、ssion and Analysis3.3.3 Shareholders equityAs at the end of the reporting period,the Groups equity attributable to shareholders of the Bank was RMB945.503 billion,representing an increase of 10.10%as compared with the end of the previous year,among which retained profits amounted to RMB492.971 billi

293、on,representing an increase of 15.02%as compared with the end of the previous year;investment revaluation reserve amounted to RMB11.815 billion,representing a decrease of 21.48%as compared with the end of the previous year,mainly due to the decrease in the valuation of financial assets measured at f

294、air value through other comprehensive income as compared to the end of the previous year;exchange difference on translation of foreign currency statement amounted to RMB2.009 billion,representing an increase of RMB4.153 billion as compared with the end of the previous year,mainly due to the fluctuat

295、ions in RMB exchange rate.3.4 Analysis of Loan Quality3.4.1 Distribution of loans by 5-tier loan classificationThe following table sets forth the 5-tier loan classification of the Group as at the dates indicated.31 December 202231 December 2021 (in millions of RMB,except for percentages)AmountPercen

296、tage of the total amount(%)AmountPercentage of the total amount(%)Normal5,919,98597.835,472,56398.25Special mention73,4701.2146,6090.84Substandard22,7700.3817,4900.31Doubtful23,7370.3920,7550.37Loss11,4970.1912,6170.23Total loans and advances to customers6,051,459100.005,570,034100.00Non-performing

297、loans58,0040.9650,8620.91 Note:Under the 5-tier loan classification system,non-performing loans of the Group are divided into substandard loans,doubtful loans and loss loans.During the reporting period,the Group insisted on strict classification of asset risks to truly reflect the asset quality.Affe

298、cted by the slowdown in economic growth and the further release of risks from real estate customers,as at the end of the reporting period,the balance of our non-performing loans amounted to RMB58.004 billion,representing an increase of RMB7.142 billion as compared with the end of the previous year,w

299、ith a non-performing loan ratio of 0.96%,representing an increase of 0.05 percentage point as compared with the end of the previous year.The balance of special-mentioned loans amounted to RMB73.470 billion,representing an increase of RMB26.861 billion as compared with the end of the previous year;th

300、e special-mentioned loan ratio was 1.21%,representing an increase of 0.37 percentage point as compared with the end of the previous year.China Merchants BankAnnual Report 2022(H share)34Chapter III Management Discussion and Analysis3.4.2 Distribution of loans and non-performing loans by product type

301、31 December 202231 December 2021 (in millions of RMB,except for percentages)Loan andadvancebalancePercentageof thetotal(%)Non-performingloanNon-Performingloan ratio(%)(1)Loan andadvancebalancePercentageof thetotal(%)Non-performingloanNon-Performingloan ratio(%)(1)Corporate loans2,375,61639.2629,9611

302、.262,150,93838.6226,7321.24Working capital loans821,26913.579,5621.16729,99913.1116,7552.30Fixed asset loans864,88014.2914,1231.63821,25914.747,2670.88Trade finance289,6054.793300.11257,4284.633970.15Others(2)399,8626.615,9461.49342,2526.142,3130.68Discounted bills(3)514,0548.49431,3057.74Retail loa

303、ns3,161,78952.2528,0430.892,987,79153.6424,1300.81Micro-finance loans631,03810.434,0310.64561,87110.093,5000.62Residential mortgage loans1,389,20822.964,9040.351,374,40624.683,8210.28Credit card loans884,51914.6215,6501.77840,37115.0913,8461.65Others(4)257,0244.243,4581.35211,1433.782,9631.40 Total

304、loans and advances to customers6,051,459100.0058,0040.965,570,034100.0050,8620.91 Notes:(1)Represents the percentage of the non-performing loans in a certain category to the total loans of that category.(2)Consists primarily of other corporate loans such as financial leasing,M&A loans and corporate

305、mortgage loans.(3)The Company will transfer discounted bills to corporate loans for accounting purposes once overdue.(4)Consists primarily of general consumer loans,commercial housing loans,automobile loans,house decoration loans,education loans and other personal loans secured by monetary assets.Wi

306、th regard to corporate loans,the Group steadily promoted improvement of the structure of customers,continuously strengthened the organisation and investment of high-quality assets,guided corporate credit resources to help bail out enterprises,thereby maintaining the quality of assets in a generally

307、stable manner.As at the end of the reporting period,the balance of our corporate loans amounted to RMB2,375.616 billion,representing an increase of 10.45%as compared to the end of the previous year,with a corporate loan ratio of 39.26%,representing an increase of 0.64 percentage point as compared wi

308、th the end of the previous year.As affected by significant risk exposure of some high-debt real estate enterprises and individual corporate customers with poor management,the balance of non-performing corporate loans amounted to RMB29.961 billion,representing an increase of RMB3.229 billion as compa

309、red with the end of the previous year;and the non-performing loan ratio of corporate loans was 1.26%,up by 0.02 percentage point as compared with the end of the previous year.With regard to retail loans,the Group actively promoted the innovation of product and business model,ensured credit support f

310、or small-and micro-sized customers,gave priority to customers with rigid housing demand and upgraders,and maintained a reasonable and moderate growth in residential mortgage loans,while continuing to adhere to the principle of stability and prudence,focusing on quality channels with a steady develop

311、ment of credit card business by acquiring valuable customers.As at the end of the reporting period,the balance of our retail loans amounted to RMB3,161.789 billion,representing an increase of 5.82%as compared to the end of the previous year,with a retail loan ratio of 52.25%,representing a decrease

312、of 1.39 percentage points as compared to the end of the previous year,of which micro-finance loans amounted to RMB631.038 billion,representing an increase of 12.31%as compared with the end of the previous year.During the reporting period,affected by the increased pressure of economic downturn,the no

313、n-performing loan ratios of micro-finance loans,residential mortgage loans and credit card loans all increased as compared with the end of the previous year.As at the end of the reporting period,the balance of non-performing retail loans amounted to RMB28.043 billion,representing an increase of RMB3

314、.913 billion as compared with the end of the previous year,with a non-performing loan ratio of 0.89%,up by 0.08 percentage point as compared with the end of the previous year,of which the balance of non-performing credit card loans amounted to RMB15.650 billion,representing an increase of RMB1,804 m

315、illion as compared with the end of the previous year;and the non-performing loan ratio of credit card loans was 1.77%,up by 0.12 percentage point as compared with the end of the previous year.China Merchants BankAnnual Report 2022(H share)35Chapter III Management Discussion and Analysis3.4.3 Distrib

316、ution of loans and non-performing loans by industry31 December 202231 December 2021 (in millions of RMB,except for percentages)Loan andadvancebalancePercentageof the total(%)Non-performingloanNon-Performingloan ratio(%)(1)Loan andadvancebalancePercentageof thetotal(%)Non-performingloanNon-Performing

317、loan ratio(%)(1)Corporate loans2,375,61639.2629,9611.262,150,93838.6226,7321.24Transportation,storage and postal services492,2488.149480.19445,6038.002,9450.66Property development375,9806.2115,3484.08401,7047.215,6551.41Manufacturing465,7127.704,7811.03333,3985.996,8712.06Production and supply of el

318、ectric power,heat,gas and water212,8933.524680.22194,6883.506580.34Leasing and commercial services161,7502.671,7841.10174,7583.144,0542.32Wholesale and retail180,7092.991,8361.02147,2722.643,7262.53Finance112,1141.854400.3995,3331.71900.09Construction105,7701.754350.41120,9342.175690.47Information t

319、ransmission,software and IT service89,8581.484060.4565,9941.182350.36Water conservancy,environment and public utilities64,9961.071000.1565,2481.171750.27Mining40,4950.675211.2934,5050.627862.28Others(2)73,0911.212,8943.9671,5011.299681.35Discounted bills514,0548.49431,3057.74Retail loans3,161,78952.

320、2528,0430.892,987,79153.6424,1300.81 Total loans and advances to customers6,051,459100.0058,0040.965,570,034100.0050,8620.91 Notes:(1)Represents the percentage of the non-performing loans in a certain category to the total loans of that category.(2)Consists primarily of agriculture,forestry,animal h

321、usbandry,fishery,accommodation and catering,health and social work,etc.The Group conscientiously implemented national policies and regulatory requirements,continued to improve the quality and efficiency of our financial services for the real economy,so as to help stabilise the macro economy,and furt

322、her increase loans to relevant industries such as new growth engines,green economy,high-quality manufacturing industries,regional advantageous and characteristic industries,inclusive finance,sci-tech finance,as well as self-controllable industries to solidly promote the adjustment of the structure o

323、f customers and industries.As at the end of the reporting period,the balance of our loans extended to the manufacturing industry amounted to RMB465.712 billion,representing an increase of 39.69%as compared with the end of the previous year,accounting for 7.70%of the total loans and advances to custo

324、mers,up by 1.71 percentage points as compared with the end of the previous year.At the same time,the Group closely tracked changes in internal and external situations,and enhanced risk prevention and control in key areas such as real estate,local government financing platforms and industries under c

325、lassified management5.During the reporting period,the non-performing loan ratio of the Group in terms of the real estate industry,financial industry,agriculture,forestry,animal husbandry,fishery and information transmission,software and information technology service industries increased due to the

326、risk exposure of high-debt real estate enterprises and individual corporate customers with poor management.5 Industries under classified management is a term coined by the Company and refers to 12 industries,including coal,coal chemical,coal trade,iron and steel,steel trade,basic chemical industry,b

327、asic metal mining and processing,non-ferrous metal smelting and rolling processing,flat glass,textile and chemical fiber,chemical fertilizer manufacturing,synthetic material manufacturing.China Merchants BankAnnual Report 2022(H share)36Chapter III Management Discussion and Analysis3.4.4 Distributio

328、n of loans and non-performing loans by region31 December 202231 December 2021 (in millions of RMB,except for percentages)Loan andadvancebalancePercentageof thetotal(%)Non-performingloanNon-Performingloan ratio(%)(1)Loan andadvancebalancePercentageof thetotal(%)Non-performingloanNon-Performingloan ra

329、tio(%)(1)Head Office(2)942,00615.5717,8111.89910,28116.3517,8621.96Yangtze River Delta1,338,76922.1210,5320.791,200,57121.557,4360.62Bohai Rim828,31113.695,1180.62719,18712.914,4790.62Pearl River Delta and West Side of Taiwan Strait1,087,41017.974,6730.431,007,51318.096,3580.63North-eastern China169

330、,5662.802,0201.19168,9743.032,3541.39Central China641,55410.608,0481.25569,78710.235,7661.01Western China633,12910.465,4680.86581,82010.454,2750.73Overseas78,5671.305440.6994,1531.692180.23Subsidiaries332,1475.493,7901.14317,7485.702,1140.67 Total loans and advances to customers6,051,459100.0058,004

331、0.965,570,034100.0050,8620.91 Notes:(1)Represents the percentage of the non-performing loans in a certain category to the total loans of that category.(2)The Head Office includes Credit Card Centre.The Group focused on serving national strategies and key areas and deepened its research on regional a

332、dvantageous industries and sectors to enhance credit policy support and resource allocation for key construction projects in the Yangtze River Delta,the Guangdong-Hong Kong-Macao Greater Bay Area and Central and Western China.Meanwhile,the Group continued to carry out research on regional developmen

333、t of“one bank,one policy”and list-based operation,formulated regional differentiation policies,and promoted the accelerated development of branches in key regions.As at the end of the reporting period,the percentage of the balance of the Groups loans extended to regions such as the Bohai Rim,the Yangtze River Delta and Central China increased.Affected by the risk exposure of some real estate custo