Interest income continues to decline, and non-interest income turns from increase to decrease. Ping An Bank's net profit in 2025 is still under pressure.
The 2025 annual report of Ping An Bank (000001.SZ) disclosed on the evening of March 20 showed that the bank’s operating income and net profit (net profit attributable to shareholders of the bank, the same below) last year continued to decline by 10.4% and 4.2% year-on-year. Compared with the previous year, the decline in the bank's operating income last year slowed down, while the decline in net profit was basically the same.
The reduction in the loan market prime rate (LPR) and the contraction of interest income caused by insufficient effective demand are still the main factors affecting revenue and profits. Last year, the bank's net interest income and non-interest net income fell by 5.8% and 18.5% respectively year-on-year.
However, positive factors have emerged. Last year, the bank's net interest margin fell by 9 basis points, a sharp 42 basis points narrower than the decline in 2024. The retail business, which has been in the throes of adjustment in recent years, has also shown signs of stabilizing, and its net profit has increased significantly compared with the previous year.
Interest spreads narrowed
Annual report data shows that as of the end of 2025, Ping An Bank's total assets were approximately 5.93 trillion yuan, a year-on-year increase of 2.7%; its deposit and loan balances were 3.58 trillion yuan and 3.39 trillion yuan, respectively, a year-on-year increase of 1.4% and 0.5%.
Compared with the previous year, the bank's operating income last year still declined, but the decline narrowed, while the decline in net profit was basically the same.
Last year, the bank achieved operating income of 131.44 billion yuan, a year-on-year decrease of 10.4%; net profit was 42.63 billion yuan, a year-on-year decrease of 4.2%. In 2024, the bank's revenue and net profit dropped by 10.9% and 4.2% respectively.
The year-on-year decline in revenue and profits was related to the decline in non-interest income. For the whole of last year, the bank's non-interest net income was 43.421 billion yuan, a year-on-year decrease of 18.5%. In the previous year, this figure was 53.268 billion yuan, a year-on-year increase of 14%.
The largest decline was in other non-interest net income, with a total scale of 19.527 billion yuan, a year-on-year decrease of 33%. Ping An Bank explained that this was mainly due to the decline in non-interest net income from bond investment and other businesses due to market fluctuations in 2025. Among them, the largest decrease was the gain and loss from changes in fair value, which was a floating loss of 2.518 billion yuan, a year-on-year decrease of 181.1%.
Compared with non-interest income, the factor that has the greatest impact on performance is still interest income. The annual report shows that for the whole of last year, the bank’s interest income was approximately 169.86 billion yuan, a year-on-year decrease of 14.4%. Among them, deposit interest income was 130.5 billion yuan, a year-on-year decrease of 15.4%. This resulted in the bank's net interest income last year falling 5.8% year-on-year to 88.021 billion yuan.
The main reason for the decline in interest income comes from the narrowing of interest spreads. In 2025, the bank's average loan yield will be 3.87%, a year-on-year decrease of 67 basis points, of which the average corporate and personal loan yields will be 3.05% and 4.79%, respectively, a year-on-year decrease of 51 and 77 basis points.
In this regard, Ping An Bank explained that this is because the bank has increased credit support for key industries, regions and customers, increased the proportion of high-quality customer groups, and driven the continuous optimization of customer group structure and asset structure; secondly, due to the decrease in the loan market quoted interest rate (LPR), coupled with the lack of effective credit demand, the interest rate of new loans continued to decline, coupled with the impact of factors such as interest rate adjustments and repricing of existing mortgage loans, the loan yield declined year-on-year.
During the same period, the bank's interest expenses in 2025 will be 81.84 billion yuan, a year-on-year decrease of approximately 23.1 billion yuan, a decrease of 22%. Deposit interest expenses fell from 72.3 billion yuan in the previous year to 59.4 billion yuan, a decrease of nearly 13 billion yuan, a decrease of 17.9%; the average interest payment rate of interest-bearing liabilities was 1.67%, a year-on-year decrease of 47 basis points; the average interest payment rate of deposits was 1.65%, a year-on-year decrease of 42 basis points, but both were lower than the decline in loan yields.
Under this circumstance, the bank's net interest margin and net interest margin also dropped by 0.09 and 0.07 percentage points year-on-year to 1.78% and 1.76% respectively.
The bank expects that in the context of asset repricing and support for the real economy, there will still be downward pressure on net interest margins, but the downward trend is expected to slow down. It will continue to strengthen asset and liability portfolio management, refine pricing management, and provide forward-looking guidance to mitigate the downward trend in interest margins. On the asset side, we will continue to allocate large categories of assets and encourage high-quality credit; at the same time, we will strengthen market research and judgment, flexibly and dynamically allocate interbank assets, and improve the efficiency of capital utilization. On the liability side, we focus on guiding the absorption of low-cost deposits, controlling high-cost deposits, and making every effort to control and reduce overall liability costs.
However, positive factors have emerged. The bank's net interest margin decline last year has slowed significantly. In 2024, the bank's net interest margin and net interest margin will be 1.87% and 1.83% respectively, a decrease of 0.51 percentage points and 0.48 percentage points compared with 2023.
Retail profits stop falling and stabilize
After more than two years of adjustments, Ping An Bank’s retail business performance has shown signs of stabilizing.
Annual report data shows that last year, the bank's retail business achieved operating income of 61.26 billion yuan, operating profit before impairment of 40.83 billion yuan, total profit of 3.22 billion yuan, and net profit of 2.68 billion yuan. Compared with the previous year, the latter two indicators increased by 2.864 billion yuan and 2.394 billion yuan respectively, a year-on-year increase of more than 800%, and their proportion in the total net profit increased from 0.6% to 6.3%.
Such changes are mainly due to the decrease in the scale of asset impairment. Last year, the bank's retail credit and other asset impairment losses totaled 37.57 billion yuan, a year-on-year decrease of nearly 11.2 billion yuan, and a drop of more than 22% from the previous year's 48.7 billion yuan.
In addition, the non-performing ratio of Ping An Bank's personal loans also dropped from 1.39% at the end of 2024 to 1.23% at the end of last year, a year-on-year decrease of 0.16 percentage points. In addition to operating loans, the non-performing ratios of personal housing mortgages, credit cards, consumer loans and other loans fell by 0.19, 0.32 and 0.23 percentage points respectively year-on-year.
Wealth management income in the retail business also saw considerable growth. Last year, Ping An Bank's wealth management fee income was 5.06 billion yuan, a year-on-year increase of 15.8%; of which, personal insurance agency income was 1.292 billion yuan, a year-on-year increase of 53.3%; personal financial management agency income was 1.287 billion yuan, a year-on-year increase of 8.8%; personal fund agency income was 2.290 billion yuan, a year-on-year increase of 8.9%.
The annual report shows that Ping An Bank’s asset quality continues to improve slightly. As of the end of last year, the bank's non-performing loan ratio was 1.05%, a year-on-year decrease of 0.01 percentage points; the non-performing loan generation rate was 1.63%, a year-on-year decrease of 0.17 percentage points.
During the same period, the bank's proportion of overdue loans also declined. As of the end of last year, the bank's focus on loans accounted for 1.75%, a decrease of 0.18 percentage points from the end of the previous year; overdue loans accounted for 1.34%, a decrease of 0.18 percentage points from the end of the previous year; the deviations of loans overdue for 60 days and more than 90 days were 0.67 and 0.56 respectively; the credit and other asset impairment losses for the year were 40.56 billion yuan, a year-on-year decrease of 17.9%.
Ping An Bank said that this was mainly due to the overall macroeconomic stability and progress. The bank continued to optimize its business structure, strengthened the collection of non-performing assets, achieved results in risk management and control of key large accounts, and reduced overall impairment provisions. Among them, the total amount of non-performing assets recovered was 36.798 billion yuan, including the principal of written-off non-performing assets of 19.11 billion yuan; and 97.2% of the recovery amount was cash recovery.
