What is Ping An Bank's confidence in its 2026 goal of "returning to growth"?

How does the transformation strategy led by Ji Guangheng support growth targets?

“Return to Growth” - is the key phrase that runs through Ping An Bank’s 2025 earnings conference.

On March 23, Ping An Bank (000001.SZ) held its 2025 annual earnings conference, where Ji Guangheng, Secretary of the Party Committee and President of Ping An Bank, emphasized, “Ping An Bank has completed the bottoming out of its performance, and the most difficult times are behind us,” and “In 2026, we will fully and vigorously achieve the operational goal of returning to growth.”

Affected by factors such as market interest rate decline, interest rate cuts and concessions in the banking industry, and active adjustments to asset structures, Ping An Bank’s revenue and profits are still both declining in 2025. However, the bank’s senior management has set the goal of “returning to growth.” What is the confidence behind this performance?

From the financial report data, although some static indicators of the bank are still declining, many dynamic trends show significant recovery: for example, the decline in net interest margin has narrowed, interest expenses have been significantly optimized, retail risks have been continuously cleared, and asset quality has been continuously improved…

In the third year of Ji Guangheng “steering” Ping An Bank, can the “retail dark horse” in difficult transformation return to growth? The market is eagerly watching.

Supporting the management’s proposed goal of “returning to growth” is the performance in 2025, which released many positive signals.

The most crucial factor is the narrowing decline in net interest margin: in 2025, Ping An Bank’s net interest margin was 1.78%, down 9 basis points year-on-year, but the decline was significantly narrower than in 2024.

The narrowing decline in net interest margin means that the bank’s profitability downturn has been effectively curbed, laying the foundation for the operation to return to positive growth. The net interest margin is the ratio of the bank’s net interest income to all interest-earning assets, and it is a core indicator of the bank’s profitability.

Breaking it down, the narrowing decline in Ping An Bank’s net interest margin benefited from a significant decrease in liability costs: in 2025, the average interest rate on interest-bearing liabilities was 1.67%, down 47 basis points year-on-year; the average interest rate on deposits was 1.65%, down 42 basis points year-on-year.

The significant reduction in liability costs stems from Ping An Bank’s strengthening of low-cost deposit absorption and agile control over the pace of deposit and interbank liability absorption, which lowered the interest rate level.

“From the data disclosed in the third quarter of 2025, our interest rate reduction is the highest among major joint-stock banks, with an annual interest margin of 1.78%, basically stabilizing,” Ji Guangheng stated at the earnings conference.

Comparing Ping An Bank’s net interest margin performance over the past three years, the decline in 2025 was nearly flat, which is in line with industry trends. Since the second quarter of 2025, commercial banks’ net interest margins have maintained at 1.42% for three consecutive quarters, achieving a halt in the decline.

However, it should be noted that the average yield on loans and advances was 3.87%, a decrease of 67 basis points year-on-year compared to 2024, which is a larger decline than the decrease in the average interest rate on deposits (42 basis points). This also means that the downward pressure on the bank’s asset-side yield still exceeds the improvement in liability-side costs, putting continued pressure on the net interest margin.

“The retail business has already emerged from the most difficult period,” said Wang Jun, Assistant President of Ping An Bank, at the conference. “Several core indicators have shown improvement, and the turning point for the retail business has gradually appeared.”

In recent years, Ping An Bank has continuously promoted the transformation of its retail strategy, primarily focusing on optimizing customer acquisition channels (enhancing the capability of its own channels), deepening customer stratification management, and enriching the product shelf system to enhance the proportion of high-quality business.

How can we determine that the retail turning point has indeed emerged? Wang Jun provided the basis: first, asset quality has continuously improved. By the end of 2025, the bank’s personal loan non-performing ratio had decreased by 0.16 percentage points year-on-year.

Second, the scale of retail loans has ceased to decline. According to Wang Jun, by the end of 2025, the bank’s retail loan balance had decreased by 2.3% year-on-year, but the decline had narrowed by 8.3 percentage points; from a quarter-on-quarter perspective, the retail loan scale decreased by 41.2 billion yuan in the first half of 2025, but achieved positive growth of 1.3 billion yuan in the second half, essentially stabilizing.

From the product structure perspective, the bank’s credit card installment and revolving assets have stabilized; mortgage and auto financing balances have maintained positive growth; and the balances of Cheng e-loan and Cheng ye-loan have surpassed 30 billion yuan.

Third, the asset structure of bank-managed assets has been optimized. Focusing on the crucial deposit business, the bank has promoted an increase in high-quality deposit scale: in 2025, the average daily balance of personal deposits increased by 2.7% year-on-year, with the average daily balance of personal demand deposits increasing by 12.9% year-on-year; while steadily increasing deposits, the bank’s average interest rate on personal deposits decreased by 36 basis points.

On the other hand, wealth management income represented by insurance middle-income contributions has continuously increased. In 2025, the bank’s wealth management fee income was 5.061 billion yuan, a year-on-year increase of 15.8%; among this, the bank’s agency personal insurance income was 1.292 billion yuan, a year-on-year increase of 53.3%.

Fourth, the decline in retail business revenue has narrowed, and net profit has shown a restorative growth. In 2025, retail business operating revenue decreased by 13.5% year-on-year, but the decline was narrowed by 12.4 percentage points compared to 2024, with the revenue decline trend becoming milder.

In recent years, with strengthened risk control, optimized customer structure, and a year-on-year decrease in credit impairment losses, the net profit of Ping An Bank’s retail business has also shown restorative growth: rising sharply from 289 million yuan at the end of 2024 to 2.683 billion yuan.

“Through these four aspects, we judge that the turning point for the retail business has basically appeared,” Wang Jun stated. “In 2026, as loans return to growth or with the high-quality development of large wealth management, we preliminarily judge that retail business revenue and profit will further increase and improve.”

In Ping An Bank’s retail business transformation, corporate banking has played a “ballast” role, supporting the bank’s profit performance.

In terms of “volume,” both corporate deposit and loan balances have increased. By the end of 2025, the bank had corporate deposit balances of 2,295.255 billion yuan, an increase of 2.2% compared to the end of the previous year; corporate loan balances were 1,663.546 billion yuan, an increase of 3.5% compared to the end of the previous year.

In terms of “price,” the average interest rate on corporate deposits decreased year-on-year to 1.55%, compared to 2.01% in 2024. According to the bank, it has focused on developing low-cost liability sources and optimizing deposit structure and costs.

However, in terms of “risk,” the non-performing ratio of corporate loans has increased. By the end of 2025, it increased by 0.17 percentage points to 0.87%, mainly affected by increased risks from some existing real estate business.

The risks of Ping An Bank’s corporate real estate loans have attracted market attention. The annual report shows that the bank currently bears credit risks from real estate-related businesses, with corporate real estate loan balances at 210.181 billion yuan, a decrease of 35.038 billion yuan compared to the end of the previous year; by the end of 2025, the bank’s non-performing ratio for corporate real estate loans was 2.22%, an increase of 0.43 percentage points compared to the end of the previous year.

In response, Ping An Bank’s Chief Compliance Officer Wu Leiming analyzed, “In the corporate sector, there was a bit of a concentrated outbreak in the first quarter of 2025, but after the second quarter, both overdue and new non-performing loans have decreased, and the new risk has been effectively controlled, and our collection efforts have shown significant results.”

“It can be confidently said that the peak period for the generation of real estate risks has passed, and the overall exposure to real estate risks is in a stable zone. This year has clearly improved,” he emphasized.

Apart from the above business performances, the quality of the bank’s assets directly determines whether the bank operates “lightly” or “heavily.”

According to the financial report, by the end of 2025, the bank’s non-performing loan ratio was 1.05%, a decrease of 0.01 percentage points; the non-performing generation rate decreased by 0.17 percentage points year-on-year, especially with a significant reduction in retail non-performing generation, and the provision coverage ratio maintained at 221%, indicating good risk compensation capacity.

Breaking it down, in the corporate sector, by the end of 2025, the bank’s corporate loan non-performing ratio was 0.87%, an increase of 0.17 percentage points compared to the end of the previous year. “Last year, the non-performing generation rate in the corporate sector rose mainly due to the impact of the real estate industry, but the non-performing ratio still remains relatively low,” Wu Leiming explained.

In the retail sector, by the end of 2025, the bank’s personal loan non-performing ratio was 1.23%, a decrease of 0.16 percentage points compared to the end of the previous year. “With the clearance of our existing high-risk assets, retail non-performing generation has essentially reached its peak, and this trend has been continuing.”

Wu Leiming stated, “This trend will continue this year, and the quality of the new retail business assets we are launching is also good, so overall future risks are expected to stabilize.”

Overall, as Ping An Bank clears the high-risk retail stock and corporate real estate risk, the bank has already passed the “peak period” of risk exposure.

With the new quality assets being launched, the bank’s asset structure will continue to optimize, “We expect that in 2026, the overall asset quality will remain stable, the non-performing generation rate will continue to decline, and the provision coverage ratio will be maintained at a reasonable level.”