3-Year Decline, 40 Million Fine! Ping An Bank's Challenges and Changes | Financial Report Analysis

How does a reduction in impairment losses affect profit performance?

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Three consecutive years of decline.

On March 20, 2026, Ping An Bank once again disclosed its 2025 annual performance report, which is somewhat complicated. Especially since operating income fell by 10.4% year-on-year, marking the third consecutive year of decline, with significant drops—8.45% in 2023, 10.93% in 2024.

As the previous growth logic gradually fails, can Ping An Bank still stay “safe”?

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First, look at revenue.

In 2025, Ping An Bank’s operating income was 131.442 billion yuan, down 10.4% year-on-year. As mentioned at the beginning, this is the third consecutive year of significant decline.

Chart source | Eastmoney (Special thanks)

Net interest income is the main drag. In 2025, Ping An Bank’s net interest income was 88.021 billion yuan, down 5.8% year-on-year, accounting for 67.0% of operating income;

The decline in net interest income was mainly affected by two factors: first, net interest margin narrowed to 1.78%, down 9 basis points year-on-year, reflecting pressure from falling loan rates and asset structure adjustments;

Second, the average yield on interest-earning assets decreased from 3.97% to 3.43%, a drop of 54 basis points, significantly larger than the 47 basis points decline in the average interest paid on liabilities, indicating weakened asset-side profitability.

Non-interest net income was 43.421 billion yuan, down 18.5% year-on-year, accounting for 33.03%, a decrease of 3.28 percentage points compared to 2024.

Retail business was once Ping An Bank’s “trump card,” but it continued to shrink in 2025: revenue was 6.163 billion yuan, nearly 1 billion yuan less than in 2024, a decrease of 13.5% year-on-year.

In 2025, personal loan balances decreased by 2.3%, credit card receivables decreased by 6.8%, and circulating accounts decreased by 6.9%. Consumer loans and commercial loans declined by 2.5% and 5.2%, respectively.

However, auto finance loan balances grew by 3.7%, and new loans for new energy vehicles increased by 13.9% year-on-year, aligning with industry trends.

Wealth management business also grew by 1.9% year-on-year; retail client assets (AUM) managed reached 4.2384 trillion yuan, up 1.1%; private banking clients numbered 105,600, an increase of 9.1%, and personal insurance agency income grew by 53.3% year-on-year.

In corporate banking, Ping An Bank’s operating income was 57.959 billion yuan in 2025, accounting for 44.1% of total revenue, down 9.2% year-on-year. However, the number of corporate clients reached 966,000, an increase of 13.2%.

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On the profit side, Ping An Bank’s net profit also declined in 2025, but the decline was smaller than revenue.

In 2025, net profit attributable to the parent company was 42.633 billion yuan, down 4.2% year-on-year, marking the second consecutive year of decline. This was mainly due to a 17.9% decrease in provisions for credit and other asset impairments.

Using leverage calculations: the annual report shows that in 2024, Ping An Bank made impairment provisions of 49.428 billion yuan, which decreased by 8.861 billion yuan in 2025.

If the provisions had remained at 2024 levels in 2025, profit would have fallen from 42.6 billion yuan to about 33.7 billion yuan, a decline of over 20%. This shows that reduced impairment provisions significantly contributed to current period profits.

For example, retail business net profit in 2025 was 2.683 billion yuan, compared to 280 million yuan in 2024. This is the biggest change in the bank’s profit structure.

Why did retail profit surge? The annual report shows that in 2025, retail impairment losses decreased from 48.7 billion yuan to 37.6 billion yuan, a reduction of about 11.1 billion yuan.

Therefore, before impairment losses, Ping An Bank’s operating profit actually decreased: from 49.2 billion yuan to 40.8 billion yuan.

Under these operations, in 2025, Ping An Bank’s loan loss reserve coverage ratio was 220.88%, down 29.83 percentage points year-on-year, but the absolute value remains relatively stable.

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Regarding other asset quality aspects, Ping An Bank’s non-performing loan ratio slightly decreased from 1.06% to 1.05% in 2025, remaining relatively stable.

The most concerning is real estate. In 2025, the non-performing rate of corporate real estate loans increased from 1.79% to 2.22%. The involved real estate loans totaled 21.0181 billion yuan, accounting for 12.6% of corporate loans.

Management explained that the real estate market is still in the process of stabilizing after a decline, with some developers experiencing longer sales cycles and tighter funding.

Specifically, the composition of real estate loans includes: development loans of 65.3 billion yuan, accounting for 1.9% of total loans; operational property loans, mergers, and other loans totaling 144.9 billion yuan, mainly secured by mature properties.

Another category is restructured loans. As of the end of 2025, restructured loans totaled 41.118 billion yuan, an increase of 9.2% from the previous year, mainly due to impacts from the real estate industry, involving extensions and repayment adjustments.

On personal loans, the non-performing rate at the end of 2025 was 1.23%, down 0.16 percentage points from the previous year. This improvement is hard-won.

Among these, credit card non-performing rate decreased from 2.56% to 2.24%, consumer loans from 1.35% to 1.12%, and housing mortgages from 0.47% to 0.28%. Only commercial loans’ non-performing rate increased from 1.02% to 1.17%.

Finally, regarding risk control, leverage game data shows that Ping An Bank received 64 penalty notices in 2025, totaling 40.3669 million yuan. Among these, 25 were institutional penalties. While not large compared to other joint-stock banks, the average penalty was 1.3022 million yuan, ranking relatively high.

On March 20, 2026, Ping An Bank received a large penalty notice of 1.05 million yuan from the Jingzhou Regulatory Bureau of the International Financial Regulatory Authority. The main violations included: inadequate pre-loan investigation and post-loan management, misappropriation of loan funds, increasing customer financing costs, and poor staff behavior management.

In summary, external environment challenges combined with internal “risk mitigation,” Ping An Bank in 2025 can be described as continuing through a period of pain, with no signs of reversal yet.

Rebirth requires a price, time, and resolve. Holding on now means everything.

All charts not marked with sources are from the company’s official website or announcements. Special thanks.

Lawyer Yilong Ren’s Team

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