China Merchants Bank : ·THIRD QUARTERLY REPORT OF 2019

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

招 商 銀 行 股 份 有 限 公 司

CHINA MERCHANTS BANK CO., LTD.

(a joint stock company incorporated in the People's Republic of China with limited liability)

(H Share Stock Code: 03968)

(Preference Share Stock Code: 04614)

THIRD QUARTERLY REPORT OF 2019

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).

1 IMPORTANT NOTICE

1. 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.
2. The 4th meeting of the Eleventh Session of the Board of Directors of the Company has unanimously approved the third quarterly report of 2019 of the Company through voting by correspondence. 17 out of 17 eligible directors attended the meeting.
3. 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.

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1. "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.
2. Li Jianhong, Chairman of the Board of Directors of the Company, Tian Huiyu, President, Wang Liang, an Executive Vice President and the 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.

2 GENERAL INFORMATION

2.1 Major accounting data and financial indicators of the Group

			Increase/
			decrease at
			the end of
	At the end of		the reporting
	the reporting	At the end of	period as
	period	last year	compared to
	30 September	31 December	the end of
	2019	2018	last year (%)
	(in millions of RMB, unless otherwise stated)
Total Assets	7,305, 925	6,745,729	8.30
Equity attributable to shareholders
of the Bank	596,425	540,118	10.42
Net assets per share attributable to
ordinary shareholders of the Bank
(in RMB Yuan)	22.30	20.07	11.11
			Increase/
			decrease as
			compared
			to the
	January to	January to	corresponding
	September	September	period of
	2019	2018	last year (%)
	(in millions of RMB, unless otherwise stated)
Net cash used in operating activities	(53,732)	(174,705)	69.24
Net cash used in operating activities
per share (in RMB Yuan)	(2.13)	(6.93)	69.26

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				Increase/
				decrease
				during the
				period from
				January to
				September
				2019 as
	The reporting			compared
	period			to the
	July	January to	January to	corresponding
	to September	September	September	period of
	2019	2019	2018	last year (%)
	(in millions of RMB, unless otherwise stated)
Net operating income	69,407	207,745	188,281	10.34
Net profit attributable to shareholders
of the Bank	26,627	77,239	67,380	14.63
Basic earnings per share attributable to
ordinary shareholders of the Bank
(in RMB Yuan)	1.04	3.05	2.66	14.66
Diluted earnings per share attributable
to ordinary shareholders of the Bank
(in RMB Yuan)	1.04	3.05	2.66	14.66
Annualised weighted average return				Increase of
on net assets attributable to ordinary				0.12 percentage
shareholders of the Bank (%)	19.18	19.19	19.07	point

Note: The relevant indicators are calculated in accordance with the provisions of 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 completed the relevant approval procedures for the payment of dividends for offshore preference shares in the second interest-bearing year in September 2019. Therefore, when calculating earnings per share, return on average equity and net assets per share, the dividend on the preference shares was deducted from "net profit attributable to shareholders of the Bank", while the preference shares were deducted from both the "average equity" and the "net assets".

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1. 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 30 September 2019 and the equity attributable to shareholders of the Bank at the end of the reporting period.
2. 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 authority on the Group and the Company were that: the minimum capital requirements for capital adequacy ratio, Tier 1 capital adequacy ratio and core Tier 1 capital adequacy ratio were 8%, 6% and 5%, respectively. Based on the above-mentioned minimum capital requirements, further provision shall be made for reserve capital, counter-cyclical capital and additional capital, of which the reserve capital, counter-cyclical capital and additional capital were required to be 2.5%, 0% and 0%, respectively, which represented that the capital adequacy ratio, the Tier 1 capital adequacy ratio and the core Tier 1 capital adequacy ratio of the Group and the Company during the reporting period should not be lower than 10.5%, 8.5% and 7.5%, respectively.

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As at the end of the reporting period, the capital adequacy ratio, Tier 1 capital adequacy ratio and core Tier 1 capital adequacy ratio of the Group under the Internally-Modelled Based Approaches were 15.44%, 12.66% and 11.90%, respectively.

			Increase/
			decrease at
			the end of
			the reporting
			period as
	30 September		compared to
	31 December	the end of
The Group	2019	2018	last year (%)
	(in millions of RMB, except for percentages)
The capital adequacy ratios under
the Internally-Modelled
Based Approaches (1)	533,586
Net core Tier 1 capital	482,340	10.62
Net Tier 1 capital	567,679	516,433	9.92
Net capital	692,051	641,881	7.82
Core Tier 1 capital adequacy ratio	11.90%	11.78%	Increase of
			0.12 percentage
	12.66%		point
Tier 1 capital adequacy ratio	12.62%	Increase of
			0.04 percentage
	15.44%		point
Capital adequacy ratio	15.68%	Decrease of
			0.24 percentage
			point
Information on leverage ratio (2)	8,573,568
Total on and off balance sheet	7,812,054	9.75
assets after adjustment	6.62%
Leverage ratio	6.61%	Increase of
			0.01 percentage
			point

Notes:

1. The "Internally-Modelled Based Approaches" refers to the advanced measurement approach set out in the "Capital Rules for Commercial Banks (Provisional)" issued by the former CBRC on 7 June 2012 (same as below). In accordance with the requirements of the Internally-Modelled Based Approaches, 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 ratio 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. and China Merchants Fund Management Co., Ltd.. During the parallel run period when the Internally- Modelled Based Approaches 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. 2019 is the fifth year since the implementation of the parallel run period.

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