【Huachuang Finance Xu Kang Team】Ping An Bank 2025: Core Revenue Shows Some Improvement, Wealth Management Business Develops Well

(Source: Xiaokang Financial)

Event:

On the evening of March 20, Ping An Bank disclosed its 2025 annual report, achieving operating income of 131.442 billion yuan, down 10.4% year-over-year; net profit attributable to shareholders was 42.633 billion yuan, down 4.2% YoY. The non-performing loan ratio remained steady at 1.05%, with a loan loss reserve coverage ratio of 221%, down 8.7 percentage points from the previous quarter. The company announced an annual cash dividend of 0.596 yuan per share (tax included), with a dividend payout ratio of 28.83%, up 0.5 percentage points YoY.

Comments:

Core revenue growth slowed, while other non-interest income faced pressure amid bond market volatility, leading to a slight widening of the revenue decline. In 2025, operating income and net profit attributable to shareholders decreased by 10.4% and 4.2% respectively, slightly wider than the -9.8% and -3.5% declines in the first three quarters, mainly due to bond market fluctuations in Q4, which pressured other non-interest income. Breaking down the figures, net interest income for the full year declined by 5.8% YoY, a significant narrowing from the -8.2% in the first three quarters, mainly due to a narrower interest spread YoY; net fee and commission income remained stable, decreasing only slightly by 0.9% YoY; however, bond-related fair value changes and investment income decreased due to bond market volatility, with other non-interest income down 33.0% YoY. Supported by improvements in non-performing loan generation rates, the weakening of provisioning efforts helped sustain profits, with credit and other asset impairment losses decreasing by 17.9% YoY. The loan loss reserve coverage ratio remains at 221%, down 8.7 percentage points from the previous quarter.

Retail loans saw a narrower decline, with volume and price still prioritized. Interest-earning assets grew steadily by 2.9% in 2025, with loans increasing 0.5% YoY, mainly because high-risk, high-return retail loans are still being adjusted, and the company actively reduced bill discounts. However, the growth rate of retail loans slowed. 1) Retail loans: at the end of 2025, retail loans declined by 2.3%, narrowing by 1.0 percentage point from the previous quarter, with mortgage loans remaining the main growth component; other retail loans’ declines also narrowed. At the end of 2025, YoY growth rates were 8.9% for mortgages, -6.8% for credit cards, -2.5% for consumer loans, and -5.2% for personal business loans. 2) Corporate loans: by the end of 2025, general corporate loans increased 9.2% YoY, while bill discounting decreased 40.0%, continuing to reduce bills to maintain volume and price balance.

Net interest margin narrowed less YoY in Q4, benefiting from credit structure optimization. The quarterly average daily net interest margin was 1.73%, down 6 basis points from the previous quarter, with a narrower YoY decline (Q4 2024 QoQ decline was 17bp), mainly due to reduced bill discounts and narrower decline in retail loan yields. 1) Asset side: yield on interest-earning assets decreased by 17bp QoQ to 3.23%, with loan yields down 25bp to 3.59%. Specifically, the yields on company loans, retail loans, and bill discounts decreased by 12bp, 35bp, and 7bp respectively, to 2.90%, 4.37%, and 1.16%. 2) Liability side: interest-bearing liability costs decreased by 10bp QoQ to 1.51%, mainly due to a significant drop in deposit interest costs, which fell 12bp to 1.47%. The costs for corporate and retail deposits declined by 13bp and 10bp to 1.37% and 1.66%, respectively.

Agency insurance business continues to drive wealth management improvement. In 2025, wealth management fees became the core growth driver for fee income, reaching 5.061 billion yuan, up 15.8% YoY. The growth was mainly driven by agency insurance. Agency insurance, wealth management, and fund businesses grew YoY by 53.3%, 8.8%, and 8.9%, respectively. The retail customer base remained stable, ending the year with 128 million retail accounts, up 1.9% YoY. High-value clients grew more strongly, with wealth and private banking clients increasing by 2.4% and 9.1% YoY. Retail assets under management (AUM) reached 42.4 trillion yuan, up 1.1%, while private banking AUM reached 19.9 trillion yuan, up 0.8%.

Asset quality remained stable, with retail risk continuing to ease and corporate real estate risk still manageable. At the end of 2025, the non-performing loan ratio was steady at 1.05%, with the full-year NPL generation rate at 1.63%, down 1bp from H1 2025. The watchlist and overdue rates (according to the parent bank) increased slightly, by 1bp and 3bp respectively, to 1.75% and 1.34%. The restructuring of retail loans has been effective, with asset quality continuously improving. Retail NPL ratio decreased by 1bp to 1.23%. For corporate loans, affected by some existing real estate sector risks, the NPL ratio increased by 1bp to 0.87%, but overall risk remains controllable. The loan loss reserve coverage ratio remains at 221%, down 8.7 percentage points from the previous quarter.

Investment recommendation: Slight.

Risk warning: Insufficient economic growth momentum further pressures bank interest margins; bank credit deployment underperforms expectations.

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