Ping An Bank's latest announcement! The four major retail key indicators are recovering, what signals does this send?

Although revenue and net profit have not yet returned to positive growth, the just-released Ping An Bank 2025 annual report shows signs of recovery in some key operational indicators.

First, interest expense costs on liabilities have been significantly reduced, providing a safety cushion for stabilizing net interest margins; second, retail transformation is deepening, with many indicators bottoming out and beginning to rebound.

The dividend plan approved by Ping An Bank’s board indicates that in 2025, the bank plans to pay a cash dividend of 5.96 yuan per 10 shares (tax included), totaling 11.566 billion yuan in dividends, with 2.36 yuan paid mid-year and a proposed 3.60 yuan at year-end. The cash dividend payout ratio is about 27.13%, continuing a stable shareholder return policy.

Interest expense costs have been sharply reduced, contributing to the stabilization of net interest margins.

As of the end of 2025, Ping An Bank’s total assets reached 5.93 trillion yuan, an increase of 2.7% from the end of the previous year. Profitability indicators show that last year, the bank achieved operating income of 131.442 billion yuan, down 10.4% year-on-year; net profit was 42.633 billion yuan, down 4.2% year-on-year. The bank attributes the lack of positive growth to factors such as changes in market interest rates and adjustments in business structure.

However, this is a result of ongoing cost reduction and efficiency improvement efforts: the bank’s business and management expenses in 2025 totaled 38.196 billion yuan, down 5.9% year-on-year.

The significant reduction in interest expense costs is arguably the most impressive operational performance in the bank’s strategic transformation—last year, Ping An Bank’s interest expense rate decreased sharply by 42 basis points year-on-year. This means that while deposit levels remained stable, the bank effectively managed its liability costs, narrowing the interest margin decline and providing a substantial safety cushion.

Specifically, by the end of 2025, the bank’s total liabilities were 5.37 trillion yuan, up 1.9% from the previous year; among these, the principal of absorbed deposits was 3.58 trillion yuan, up 1.4%. The average interest-bearing liability rate was 1.67%, down 47 basis points from 2024; the average interest rate on absorbed deposits was 1.65%, down 42 basis points, with the daily average balance of demand deposits about 1.19 trillion yuan, up 5.8% from 2024.

Regarding the overall reduction in liability costs, Ping An Bank states that it has strengthened the absorption of low-cost deposits and agilely adjusted the pace of deposit and interbank liability collection.

Managing the slope of interest margin decline to be less steep and slower is a common question at bank earnings presentations. From an industry-wide perspective, narrowing net interest margins is an established structural trend driven by policies favoring the real economy, deepening interest rate marketization, and economic growth factors.

The optimization of interest expense costs has clearly contributed a margin safety cushion for Ping An Bank: as of the end of 2025, the bank’s net interest margin was 1.78%, down 9 basis points from 2024; compared to June 2025, it decreased by 2 basis points from 1.8%. Both year-on-year and sequential declines have narrowed significantly.

Industry-wide data show that by the end of 2025, the average net interest margin for commercial banks was 1.42%, with joint-stock banks at 1.56%. This indicates that Ping An Bank’s 1.78% net interest margin remains relatively advantageous. Some securities analysts believe this relative advantage could give Ping An Bank greater resilience during the overall recovery of the banking sector.

Four key retail indicators are showing signs of recovery.

At the mid-year performance release in 2025, management described the latest retail reform progress with the phrase “benefit first, scale second.” This phrase effectively summarizes the bank’s phased retail strategy. At that time, retail business had not yet rebounded due to macroeconomic conditions, changes in residents’ income, and effective consumption demand. Many listed banks, including five major state-owned banks and several retail benchmark joint-stock banks, reported a collective slowdown in retail revenue and net profit share.

Currently, the retail environment remains largely unchanged. However, after shifting from “high-risk, high-return” products to “medium-risk, medium-return” products, Ping An Bank’s 2025 annual report shows that some indicators reflecting retail recovery are emerging.

Looking at traditional retail scale indicators: by the end of 2025, the bank’s retail customer base was about 127.9 million, up 1.9% from the previous year; retail customer assets under management (AUM) reached 4.24 trillion yuan, up 1.1%. These figures are average performance, neither particularly outstanding nor disappointing, consistent with other major banks’ reports.

Further analysis of key retail business trends shows:

First, it’s hard to ignore that last year, Ping An Bank’s personal loan balance shrank. As of the end of 2025, personal loans totaled 1.73 trillion yuan, down 2.3% from the previous year. Notably, this performance is consistent with the situation at the end of June 2025, indicating that the decline in retail loans in the second half of last year has stabilized and stopped shrinking further. Additionally, mortgage loans accounted for 62.9% of personal loans at year-end, reflecting a balanced “volume, price, and risk” structure.

Second, provisions for retail credit and other asset impairments decreased from 48.729 billion yuan at the end of 2024 to 37.576 billion yuan, with the proportion dropping from 98.6% to 92.6%, indicating orderly risk clearance in retail assets.

Third, retail revenue declined year-on-year in both amount and proportion, but the contribution to net profit rebounded significantly—from 2.89 billion yuan at the end of 2024 to 26.83 billion yuan—indicating a bottoming out and upward trend.

Finally, these improvements occurred alongside a reduction in retail operating expenses: in 2024, retail operating expenses were 22.036 billion yuan, decreasing to 20.792 billion yuan in 2025, reflecting cost control and efficiency gains in retail operations.

Ping An Bank provided the content.

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