China Merchants Bank : ·FIRST QUARTERLY REPORT OF 2021

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招 商 銀 行 股 份 有 限 公 司

CHINA MERCHANTS BANK CO., LTD.

(H Share Stock Code: 03968)

(Preference Share Stock Code: 04614)

FIRST QUARTERLY REPORT OF 2021

Pursuant to the regulations of the China Securities Regulatory Commission, the Company is required to publish a quarterly report for each of the first and third quarters.

The financial information set out in this quarterly report is unaudited and prepared in accordance with the International Financial Reporting Standards.

This announcement is made by the Company pursuant to Rule 13.09 and Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong).

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First Quarterly Report of 2021 (H Share)

1 Important Notice

The Board of Directors, the Board of Supervisors, Directors, Supervisors and senior management of the Company confirm that the contents in this report are true, accurate, and complete and have no false representations, misleading statements or material omissions, and they will individually and collectively accept legal responsibility for such contents.

The 23rd meeting of the Eleventh Session of the Board of Directors of the Company was held through voting by correspondence. 17 out of 17 eligible Directors attended the meeting. The first quarterly report of 2021 of the Company was unanimously approved at the meeting.

All financial statements set out in this report are prepared in accordance with the International Financial Reporting Standards and are unaudited. The unaudited quarterly report prepared by the Company in accordance with the PRC Accounting Standards has been published on the website of Shanghai Stock Exchange. Unless otherwise stated, all monetary sums stated in this report are expressed in RMB. In the event of any discrepancies in interpretation between the English and Chinese versions, the Chinese version shall prevail.

"China Merchants Bank", "the Company" and "the Bank" mentioned in this report refer to China Merchants Bank Co., Ltd.; and "the Group" refers to China Merchants Bank Co., Ltd. and its subsidiaries.

Miao Jianmin, Chairman of the Board of Directors of the Company, Tian Huiyu, President, Wang Liang, an Executive Vice 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 completeness of the financial statements in this report.

We have included in this report certain forward-looking statements with respect to the financial position, operating results and business development of the Company. We use words such as "will", "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 the Company believes that the expectations reflected in these forward-looking statements are reasonable, the Company gives no assurance that these expectations will turn into reality or prove to be correct. Therefore they should not be deemed as the Company's commitments. Investors should not place undue reliance on such statements and should pay attention to investment risks. You are cautioned that such forward-looking statements are related to future events or future financial position, business, or other performances of the Company, and are subject to a number of uncertainties which may cause substantial differences from those in the actual results.

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First Quarterly Report of 2021 (H Share)

2 General Information

2.1 Major accounting data and financial indicators of the Group

			Increase/
	At the		decrease at
	end of the		the end of the
	reporting	At the end	reporting period
	period	of last year	as compared
	31 March	31 December	to the end of
(in millions of RMB, unless otherwise stated)	2021	2020	last year (%)
Total assets	8,664,641	8,361,448	3.63
Equity attributable to shareholders of the Bank	755,107	723,750	4.33
Net assets per share attributable to ordinary shareholders
of the Bank (in RMB Yuan)(Note)	26.61	25.36	4.93
			Increase/
			decrease of
			the reporting
		Corresponding	period as
	The reporting	period	compared to the
	period	of last year	corresponding
	January to	January to	period of
(in millions of RMB, unless otherwise stated)	March 2021	March 2020	last year (%)
Net cash generated from (used in) operating activities	(32,388)	87,147	N/A
Net cash generated from (used in) operating activities
per share (in RMB Yuan)	(1.28)	3.46	N/A
			Increase/
			decrease of
			the reporting
		Corresponding	period as
	The reporting	period	compared to the
	period	of last year	corresponding
	January to	January to	period of
(in millions of RMB, unless otherwise stated)	March 2021	March 2020	last year (%)
Net operating income	84,844	76,372	11.09
Net profit attributable to shareholders of the Bank	32,015	27,795	15.18
Basic earnings per share attributable to ordinary shareholders
of the Bank (in RMB Yuan)	1.27	1.10	15.45
Diluted earnings per share attributable to ordinary shareholders
of the Bank (in RMB Yuan)	1.27	1.10	15.45
Annualised weighted average return on net assets attributable			Increase of 0.78
to ordinary shareholders of the Bank (%)(Note)	19.54	18.76	percentage point

Note: The relevant indicators are calculated in accordance with the provisions of the "Standards for the Contents and Formats of Information Disclosure by Companies Offering Securities to the Public No. 2 - Contents and Formats of Annual Reports《( 公開發行證券的公司信息披露內容 與格式準則第 2 號〈年度報告的內容與格式〉》)" and the "Rules on the Information Disclosure and Preparation of Companies Offering Securities to the Public No. 9 - Calculation and Disclosure of Return on Average Equity and Earnings per Share 《( 公開發行證券的公司信息披露編報規 則第 9 號－淨資產收益率和每股收益的計算及披露》)". The Company issued non-cumulative preference shares in 2017 and perpetual bonds in July 2020, both classified as other equity instruments. Therefore, when calculating return on average equity and net assets per share, the preference shares and perpetual bonds were deducted from both the "average equity" and the "net assets".

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First Quarterly Report of 2021 (H Share)

2.2 Explanation on the differences between the financial statements prepared in accordance with the PRC Accounting Standards and the International Financial Reporting Standards

In the financial statements prepared by the Group in accordance with the PRC Accounting Standards and the International Financial Reporting Standards, there has been no difference in the net profit attributable to shareholders of the Bank for the reporting period ended 31 March 2021 and the equity attributable to shareholders of the Bank at the end of the reporting period.

2.3 Analysis of capital adequacy ratios

The Group continued to optimise its business structure and enhance capital management, and has satisfied various capital requirements of the Chinese banking regulatory authorities during the reporting period. During the reporting period, the various capital requirements imposed by the regulatory authorities on the Group and the Company were as follows: the minimum capital requirements for the core Tier 1 capital adequacy ratio, the Tier 1 capital adequacy ratio and the capital adequacy ratio were 5%, 6% and 8%, respectively; meanwhile, the regulatory requirement for reserve capital was 2.5%. After taking into account such requirement for reserve capital, the core Tier 1 capital adequacy ratio, the Tier 1 capital adequacy ratio and the capital adequacy ratio of the Group and the Company shall not be lower than 7.5%, 8.5% and 10.5%, respectively.

As at the end of the reporting period, the core Tier 1 capital adequacy ratio, the Tier 1 capital adequacy ratio and the capital adequacy ratio of the Group under the Advanced Measurement Approach were 12.19%, 13.79% and 16.24%, respectively, each representing a decrease as compared with the end of the previous year, which was mainly due to the relatively rapid increase in risk-weighted assets.

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First Quarterly Report of 2021 (H Share)
					Increase/decrease
					at the end of the
					reporting period as
	The Group	31 March	31 December	compared to the
(in millions of RMB, except for percentages)	2021	2020	end of last year (%)
	The capital adequacy ratios under the
	Advanced Measurement Approach(1)
	Net core Tier 1 capital	641,189	610,092	5.10
Net Tier 1 capital	725,243	694,184	4.47
Net capital	854,227	821,290	4.01
Core Tier 1 capital adequacy ratio	12.19%	12.29%	Decrease of 0.10
					percentage point
Tier 1 capital adequacy ratio	13.79%	13.98%	Decrease of 0.19
					percentage point
Capital adequacy ratio	16.24%	16.54%	Decrease of 0.30
					percentage point
	Information on leverage ratio(2)
	Total on and off balance sheet
	assets after adjustment	9,803,562	9,395,026	4.35
Leverage ratio	7.40%	7.39%	Increase of 0.01
					percentage point

Notes:

1. The "Advanced Measurement Approach" refers to the advanced measurement approach set out in the "Capital Rules for Commercial Banks (Provisional)" issued by the former China Banking Regulatory Commission ("CBRC") on 7 June 2012 (same as below). In accordance with the requirements of the Advanced Measurement Approach, the scope of entities for calculating the capital adequacy ratio of the Group shall include China Merchants Bank and its subsidiaries. The scope of entities for calculating the capital adequacy ratios of the Company shall include all the domestic and offshore branches and sub-branches of China Merchants Bank. As at the end of the reporting period, the Group's subsidiaries for calculating its capital adequacy ratio included CMB Wing Lung Bank Limited, CMB International Capital Holdings Corporation Limited, CMB Financial Leasing Co., Ltd., CMB Wealth Management Company Limited（hereinafter referred to as "CMB Wealth Management"), China Merchants Fund Management Co., Ltd. and CIGNA & CMB Asset Management Company Limited. During the parallel run period when the Advanced Measurement Approach for capital measurement were implemented, a commercial bank shall use the capital floor adjustment coefficients to adjust the amount of its risk-weighted assets multiplying the sum of its minimum capital requirement and reserve capital requirement, total amount of capital deductions and the provision for excessive loan loss which can be included into capital. The capital floor adjustment coefficients shall be 95%, 90% and 80% respectively in the first year, the second year, and the third and subsequent years during the parallel run period. 2021 is the seventh year since the implementation of the parallel run period.
2. Since 2015, the leverage ratio shall be calculated based on the "Measures for Management of the Leverage Ratio of Commercial Banks (Revised)" promulgated by former CBRC on 12 February 2015. The leverage ratio of the Group was 7.39%, 7.26% and 6.52% as at the end of 2020, the end of the third quarter of 2020 and the end of the first half of 2020, respectively.