UBS released a research report stating that China Merchants Bank's (03968) first-quarter net profit increased by 1.5% year-on-year, slightly below the bank's expectations. Revenue and pre-provision operating profit (PPOP) were largely in line with the bank's forecasts. UBS currently assigns a "Neutral" rating with a target price of HK$56. During the period, revenue grew 4% year-on-year, primarily driven by a 5% increase in net interest income and a 4.9% rise in net fee income. Other non-interest income fell 2.9% year-on-year, reflecting lower bond yields supporting higher mark-to-market gains, which were partially offset by a decline in investment income, consistent with the broader industry trend. Regarding net interest margin, it narrowed by 3 basis points quarter-on-quarter and contracted 8 basis points year-on-year to 1.83%. The quarterly narrowing was mainly due to accelerated compression of loan yields from repricing.