Ping An Bank's performance declines for two consecutive years; Ji Guangheng states that by 2026, the bank will make every effort to "return to growth" | Annual Report Season

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Author | Wang Li

Source | Global Finance Talk

Without exception, Ping An Bank is the first listed bank to release its 2025 annual report. This performance continues the downward trend of 2024, with both revenue and profit declining again.

However, at the earnings conference, the bank’s management expressed optimism, stating that the most difficult times are over, and in 2026, Ping An Bank will fully strive to achieve the goal of “returning to growth.” This indicates that the 2025 performance has reached the bottom of the trend.

01

Two consecutive years of decline in performance

Ping An Bank’s 2025 operating income reached 131.442 billion yuan, down 10.4% year-on-year. Net profit was 42.633 billion yuan, down 4.2% year-on-year.

Both net interest income and non-interest income declined year-on-year. In 2025, net interest income was 88.021 billion yuan, down 5.8%; non-interest income was 43.421 billion yuan, down 18.5%.

Net interest margin was 1.78%, a decrease of 9 basis points compared to 2024. Lending scale remained relatively stable with no significant increase, so the decline in interest income is evident under the circumstances of narrowing interest margins and stable scale. Non-interest income, mainly from fees and commissions, also declined, mainly due to credit card business drag. Data shows that the bank’s credit card fee income in 2025 was 12.393 billion yuan, down 5.9% year-on-year. The decline is primarily from credit card fee income, as the bank’s credit card non-performing rate is relatively high. In recent years, the bank has consciously controlled the pace of credit card business. As of the end of 2025, the receivables balance of credit cards decreased compared to the previous year. Although the non-performing rate fell by 0.32 percentage points from the previous year, it still remains among the highest levels for the bank’s loan categories at 2.24%.

Other non-interest income declined sharply due to bond market impacts. In 2025, the bank’s other non-interest net income was 19.527 billion yuan, down 33.0% year-on-year, mainly affected by market fluctuations impacting bond investments and related businesses.

Ping An Bank Party Secretary and President Ji Guangheng stated at the earnings conference that with the ongoing deepening of strategic reforms, some operational indicators are showing positive trends. In 2026, Ping An Bank will fully strive to achieve the goal of “returning to growth.”

On one hand, the net interest margin decline has slowed and stabilized. The bank also indicated that under the background of asset re-pricing and supporting the real economy, the net interest margin is still under downward pressure, but the decline is expected to slow.

On the other hand, looking at assets, as of the end of 2025, the bank’s total assets reached 59.2577 trillion yuan, an increase of 2.7% from the previous year. At the end of Q3 last year, the bank’s total assets showed little change from the beginning of the year, indicating that the bank increased its asset expansion efforts in Q4. Data shows that in 2025, corporate loan balances increased by 3.5% from the end of the previous year, with general corporate loans rising by 9.2%.

Investment analysts are optimistic, expecting that if the bank continues to expand its scale, its operating income may turn positive in 2026.

In loan structure, personal loans decreased by 2.3% from the end of the previous year. The bank explained in its annual report that it has been continuously optimizing its retail asset portfolio strategy, increasing the proportion of high-quality customers, and promoting a balance among “volume, price, and risk.”

Over the past two years, Ping An Bank has slowed down retail financial business, which is related to the relatively high non-performing rate in retail finance. From the performance structure, the bank’s retail financial operating income in 2025 was roughly on par with wholesale finance, even slightly higher. However, due to high credit impairment provisions, the profit generated from retail finance is much lower than wholesale finance. Wholesale finance’s total profit exceeded 36.6 billion yuan, while retail finance’s total profit was only 3.2 billion yuan—a huge gap.

At the earnings conference, Ji Guangheng clearly stated that the bottoming out of retail business is basically complete, and signs of recovery are emerging.

02

Non-performing rate of real estate loans continues to rise

A key reason for believing that retail business has bottomed out is the improvement in retail non-performing loans.

Ping An Bank’s asset quality continues to improve, with a non-performing rate of 1.05% in 2025, down 0.01 percentage points from the end of last year. Personal loan non-performing rate decreased significantly, ending 2025 at 1.23%, down 0.16 percentage points from the previous year. Compared to corporate loans, personal loans still have a relatively high non-performing rate. Corporate loan non-performing rate at the end of 2025 was 0.87%, up 0.17 percentage points from the beginning of the year.

However, it should be noted that the bank’s provisioning consumption remains substantial. As of the end of 2025, the provision coverage ratio was 220.88%, down 29.83 percentage points from the previous year. Over the past three years, this ratio has been decreasing annually, but the bank’s past provisions were sufficient; otherwise, profits would be even more strained.

It is also noteworthy that the bank’s loss loans increased at the end of 2025, indicating that provisioning losses may continue.

The non-performing rate of real estate industry loans continued to rise, increasing by 0.43 percentage points from the previous year, based on the bank’s restructuring of multiple real estate loans last year.

As of the end of 2025, the bank’s restructured loan balance was 41.118 billion yuan, up 9.2% from the previous year. This was mainly due to increased risks in some real estate-related businesses, influenced by the real estate sector. The bank stated that, based on regulatory policies and actual risk assessments, it supports restructuring through loan extensions, repayment adjustments, and other methods, with effective collateral in place, maintaining overall risk controllability.

On March 23, Wu Leiming, Vice President and Chief Compliance Officer of Ping An Bank, said at the 2025 earnings conference that the real estate market remains in a deep adjustment phase, with significant pressure on corporate liquidity. Some large private enterprises have shown risk exposure, affecting the bank to some extent, and the non-performing rate in real estate increased compared to 2024. However, relative to industry averages, Ping An Bank’s level remains low.

Wu Leiming also said that in 2026, the bank will still face certain pressures in the real estate sector, but overall risks are controllable.

From the corporate perspective, Wu Leiming noted that risk generation was relatively concentrated in Q1, and after Q2, both overdue and new non-performing loans decreased. The occurrence of new risks has been effectively controlled, and recovery efforts have achieved notable results. He believes that the peak period of real estate risk generation has passed.

From the retail perspective, mortgage risk has significantly improved, with risk control measures effectively in place, and new lending performance remains good. Wu Leiming said, “Meanwhile, we are continuously enhancing risk data capabilities such as anti-fraud measures. The quality of newly issued loans remains at a good level. Although retail risks have increased somewhat, the growth rate has slowed, and overall risks are manageable.”

One day before the release of the annual report, the bank also received its first penalty of the year. On March 20, the Jingzhou Regulatory Branch of the China Banking and Insurance Regulatory Commission announced an administrative penalty against Ping An Bank. Due to inadequate pre-loan investigation and post-loan management, misappropriation of loan funds, increased customer financing costs, and poor staff conduct management, the branch fined the bank 1.05 million yuan. Warnings were issued to Zhou Huilong, Tang Peng, and Cui Wei; Wu Haiming received a warning and a two-year ban from working in banking.

Clearly, the bank still has significant compliance management gaps that need strengthening.

Additionally, if Ping An Bank plans to expand its assets in 2026, its current capital adequacy ratio, though compliant, appears insufficiently “solid.” As of the end of 2025, the bank’s core Tier 1 capital adequacy ratio was 9.36%, Tier 1 capital adequacy ratio was 11.49%, and total capital adequacy ratio was 13.77%.

In recent years, Ping An Bank has often referenced benchmarking against China Merchants Bank, but this year’s earnings report did not mention it. Compared to China Merchants Bank, its capital adequacy ratios are weaker. As of the end of Q3 last year, China Merchants Bank’s core Tier 1 capital adequacy ratio was 11.99%, Tier 1 at 13.99%, and total capital adequacy ratio at 15.07%. Although the full-year report will be released next week, based on the Q3 levels, its 2025 year-end capital adequacy ratios are unlikely to change much and are expected to be significantly higher than Ping An Bank’s.

2026 marks the start of the “14th Five-Year Plan,” and Ping An Bank has set “China’s most outstanding, globally leading intelligent retail bank” as its strategic goal, with the strategy of “strengthening retail, refining corporate banking, and specializing in interbank business.” The goal is ambitious, but achieving it will be very challenging.