# Revenue Plummets 10%, Loan Loss Coverage Ratio Drops 30%! Ping An Bank's Performance Stalls Under Mounting Pressure

(Source: Listed Company News)

On March 20, Ping An Bank Co., Ltd. (000001.SZ) released its 2025 annual report. In the final year of the 14th Five-Year Plan, Ping An Bank achieved operating revenue of 131.442 billion yuan, net profit attributable to shareholders of the bank of 42.633 billion yuan, and total assets stabilized at 5.93 trillion yuan.

However, under the main tone of steady development, the bank faces real challenges such as simultaneous declines in revenue and profit, continuous narrowing of core profitability indicators, and potential fluctuations in asset quality as it approaches the start of the 15th Five-Year Plan.

01 Revenue and profit decline together, pressure on net interest margin remains

Ping An Bank’s 2025 operating data reveal deep-seated pressures beneath the apparent “profit growth without revenue growth.” The report shows that the bank’s annual operating income decreased by 10.4% year-on-year, and net profit decreased by 4.2% year-on-year. This is the second consecutive year of revenue decline, with the decline widening. This trend is closely related to the overall industry environment of narrowing interest spreads. In 2025, the bank’s net interest margin was 1.78%, down 9 basis points year-on-year. Although the decline has slowed compared to previous years, it remains at a historic low.

The continued narrowing of net interest margin directly impacts the bank’s profitability. Net interest income, the bank’s main revenue source, fell by 5.8% year-on-year. On the liability side, the bank optimized its structure, significantly reducing the average interest paid on deposits by 42 basis points to 1.65%, effectively controlling costs. However, the yield on assets declined even faster. Due to factors such as the lowering of Loan Prime Rates (LPR), insufficient effective credit demand, and policies favoring the real economy, the average yield on loans and advances dropped from 4.54% in 2024 to 3.87% in 2025, a decrease of 67 basis points. This “faster decline in asset yields compared to liability costs” is the fundamental reason suppressing revenue performance.

Additionally, non-interest net income failed to serve as an effective “stabilizer,” decreasing by 18.5% year-on-year. Market volatility affected bond investments and other businesses, with non-interest income from these declining by 33.0%, indicating the bank’s market risk exposure remains significant in its diversification efforts. Although fee and commission income only slightly decreased by 0.9%, internal structural differences emerged, with bank card fee income down 5.9%, reflecting sluggish growth in traditional intermediary businesses.

02 Rising real estate non-performing loans, thinning provisioning “safety cushion”

In terms of asset quality, overall indicators appear stable, but structural risks and hidden dangers cannot be ignored. As of the end of 2025, the non-performing loan (NPL) ratio was 1.05%, a slight decrease of 0.01 percentage points from the previous year. However, detailed data reveal a more complex picture: corporate loan NPLs rose from 0.70% to 0.87%, with real estate sector NPLs jumping from 1.79% to 2.22%, an increase of 0.43 percentage points. Although the bank claims to have supported restructuring through extensions and repayment adjustments, with all related loans adequately collateralized, the ongoing adjustments in the real estate industry have clearly transmitted funding pressures to the bank’s credit quality.

Meanwhile, the bank’s risk buffer capacity is weakening. The provision coverage ratio dropped sharply from 250.71% at the end of 2024 to 220.88%, a decrease of 29.83 percentage points. The loan loss reserve ratio also declined from 2.66% to 2.33%. This suggests that, despite a year-on-year decrease in the generation rate of non-performing loans, the bank may have used more provisioning resources to cope with potential risks, especially with increased loan write-offs, totaling 48.233 billion yuan for the year. While this “replenishing losses with gains” strategy can maintain short-term balance sheet stability, the thinning “safety cushion” also indicates a reduced capacity to withstand future risks.

Notably, the overdue loan ratio (loans overdue by more than 60 days) decreased from 0.80% to 0.67%, showing a stricter recognition standard for non-performing loans and more cautious asset classification. However, the scale of restructured overdue loans increased, with the balance of restructured loans rising by 9.2% year-on-year, indicating that some risks are being delayed rather than truly resolved.

03 Strategic transformation and market confidence

In recent years, Ping An Bank has adhered to the strategic principles of “strengthening retail, refining corporate banking, and specializing in interbank business.” The annual report shows that retail business remains under adjustment, with personal loan balances down 2.3% year-on-year. The core indicator of “strengthening” — managing retail customer assets (AUM) — grew only 1.1%, with a significant slowdown. Although credit card non-performing rates declined, the balances and active accounts of credit card receivables decreased, indicating ongoing exploration of balancing scale and quality in retail. The corporate banking segment demonstrated stronger resilience, with corporate loan balances increasing by 3.5%, especially a 9.8% growth in loans to tech companies, which was a bright spot.

In capital management, the bank’s core Tier 1 capital adequacy ratio increased to 9.36%, up 0.24 percentage points from the previous year, thanks to issuing perpetual bonds to supplement Tier 1 capital and strengthening internal capital accumulation. However, amid declining net profits, the dividend payout ratio for common shareholders (paying 5.96 yuan per 10 shares) was 28.83%, slightly higher than last year’s 27%, reflecting management’s balancing of shareholder returns and capital accumulation.

From the perspective of capital markets, this annual report reveals Ping An Bank’s resilience and pressures in navigating economic cycles and industry-wide narrowing interest spreads. The long-term stock performance will depend on whether the bank can effectively convert the momentum of its strategic transformation into tangible profitability during the 15th Five-Year Plan, and whether it can identify new sustainable growth points under controlled risk conditions. For investors, attention should not only be on past gains and losses but also on whether the bank can “go with the trend,” effectively resolve existing risks, and seize new opportunities in fintech and green finance to achieve high-quality growth.