During the 2026 interim results conference, Ping An Bank Co.,Ltd. (SZSE: 000001) President Ji Guangheng responded to market queries about the bank's path back to growth with a candid remark: "No matter how urgent the situation, we must not panic, must not lose our composure, and must not seek hasty, misguided solutions." The bank finally delivered a return to positive growth in the first half of the year, reporting operating revenue of RMB 70.617 billion, a year-on-year increase of 1.8%, and net profit attributable to shareholders of RMB 25.696 billion, up 3.3% year-on-year.
After two consecutive years of declines in both revenue and profit, this dual growth result is a rare bright spot. However, a stronger balance sheet does not signal the return of the old growth model. The immediate driver behind the revenue turnaround was a 5.8% year-on-year increase in non-interest income, while net interest income still contracted by 0.5% during the same period. Personal loan balances remained essentially flat compared to the start of the year, and the credit cards, consumer loans, and business operation loans that once fueled retail expansion have yet to reclaim their role as growth engines.
Over the past two years, Ping An Bank Co.,Ltd. has proactively reduced high-risk retail credit and worked through legacy risks, which weighed on its income. Management believes the most difficult phase of risk clearing is now passing, and the bank's focus for revenue and asset allocation is shifting towards corporate banking. Ji Guangheng stated that the bank is pursuing "profitable growth that is high-quality, sustainable, and resilient through economic cycles." The key question remains: can this structural shift solidify into a new growth engine? After stepping back from retail, can the bank build a fresh growth framework based on corporate clients, account services, and wealth management?
Deceleration of the Former Engine
The origins of this shift trace back to the retail transformation launched in 2016, when Ping An Bank Co.,Ltd. used high-priced personal credit products like credit cards, consumer loans, and business operation loans to boost revenue and interest margins. As the economic cycle turned downward, risk costs emerged in a concentrated manner. By the end of 2023, the credit card non-performing loan (NPL) ratio had climbed to 2.77%, and the personal loan NPL ratio reached 1.37%. In response, the bank began reducing high-risk credit assets and reallocating resources towards more stable retail credit and corporate business.
The year 2023 serves as a critical reference point for understanding the old engine's trajectory. That year, Ping An Bank Co.,Ltd.'s retail finance segment generated operating revenue of RMB 96.161 billion, accounting for 58.4% of the bank's total and remaining its largest revenue source. In contrast, the corporate banking segment posted revenue of RMB 53.581 billion, or 32.5% of the total, still trailing behind retail. (Note: corporate finance here refers to the wholesale segment in the bank's financial reports, which includes corporate clients, interbank business, and Ping An Wealth Management.)
Yet, behind this high revenue figure lay substantially higher risk costs. As individual borrowers' repayment capacity weakened, the retail segment booked credit and other asset impairment losses of RMB 59.131 billion in 2023, nearly erasing its pre-impairment profit. It ultimately achieved a pre-tax profit of only RMB 6.864 billion, representing just 11.9% of the bank's total segment profit. Meanwhile, the corporate finance segment generated a pre-tax profit of RMB 36.724 billion, accounting for 63.6% of the total. Retail generated the revenue but also absorbed the bulk of risk and impairment charges, while corporate finance, despite smaller revenue, had already assumed the role of a stabilizing force on the profit statement. This backdrop accelerated the bank's need to adjust: high-risk retail assets had to be phased out, and new revenue sources needed to be cultivated.
By the first half of 2026, the corporate finance segment's revenue share had risen to 46.1%, surpassing retail finance's 44.7%, while its asset share increased from 42.2% at the end of 2023 to 52.3%. During the same period, retail finance's revenue share dropped from 58.4% to 44.7%, and its asset share fell from 34.9% to 27.6%. Ping An Bank Co.,Ltd.'s Vice President and CFO Xiang Youzhi noted that the retail business "has also resumed positive growth in both revenue and profit." However, from a segment perspective, the retail recovery is still in progress: in the first half, retail credit and other asset impairment losses reached RMB 17.772 billion, accounting for nearly 90% of the bank's total related impairment charges.
The center of gravity for revenue and asset allocation is shifting toward corporate finance. Since the segment also includes interbank and wealth management operations, this shift does not directly equate to an immediate improvement in corporate client capabilities. Other businesses, while still contributing some profit, are heavily influenced by bond market conditions and liquidity management, making them unreliable as long-term growth drivers. As the old engine ceases to lead growth, whether the migration of revenue focus can translate into stable growth capacity depends on whether corporate client operations can prove viable.
Competition for Corporate Clients
The pivot toward corporate finance is both a strategic choice and a response to market realities. At the end of 2023, Ping An Bank Co.,Ltd. held personal loans of RMB 1.98 trillion and corporate loans of RMB 1.43 trillion. By June 30, 2026, both had converged to approximately RMB 1.73 trillion. Over the past two and a half years, personal loans have contracted while corporate loans have absorbed the scale. This reflects both a shift in household leverage appetite and the bank's active reduction of high-risk retail credit. Following the real estate cycle adjustment, consumer credit demand has weakened, and the personal credit expansion logic that banks previously relied on is unlikely to continue in the short term. Ji Guangheng noted at the results conference that personal loan growth across the industry has been modest, often in the tens of billions, with many banks still experiencing negative growth.
Corporate clients have thus emerged as the new entry point, but Ping An Bank Co.,Ltd. is not alone in pursuing this path. Ji Guangheng admitted that since the start of the year, "almost all joint-stock banks have been re-emphasizing corporate business." As retail expansion loses momentum, the entire banking sector is turning en masse, making corporate loans, enterprise deposits, settlement accounts, and supply chain clients the new battleground. In the first half, the bank's corporate loans grew 3.7% from the start of the year to RMB 1.73 trillion, and corporate deposits rose 3.2% to RMB 2.37 trillion. In contrast, personal loans remained roughly flat, and personal deposits inched up just 0.3%. Both asset and liability growth have become more concentrated on the corporate side.
Vice President Fang Weihao outlined a strategy of "stabilizing the old and promoting the new." "Stabilizing the old" means defending traditional industries such as commercial services, infrastructure, public utilities, and urban operations, while "promoting the new" involves building a pipeline across 12 emerging industries, including semiconductors, energy storage, and auto parts. Management reported that new industry loans increased by RMB 31.6 billion in the first half. It is important to note that this figure uses an internal industry classification and is not directly comparable to the corporate loan balance in the interim report, so it should not be used to extrapolate the proportion of new industries in total corporate lending growth.
Cross-border finance is being positioned as a differentiator. Through products like the "Shunli Hui" platform, Ping An Bank Co.,Ltd. packages cross-border settlement, financing, cash management, and exchange rate hedging into its corporate services. In the first half, cross-border trade finance disbursements reached RMB 173.1 billion, up 11% year-on-year. The ideal scenario is that corporate financing fosters transaction relationships, which in turn drive settlement account openings and deposit accumulation, while creating entry points for payroll services, payments, and wealth management. The broader Ping An Group's integrated financial resources, cross-border capabilities, and business owner client base provide a foundation for this chain, but the current data, with corporate deposit growth outpacing personal deposits, is insufficient to confirm that public-private synergy has generated scalable returns. Management acknowledged that corporate lending was stronger in the first quarter but slowed in the second, with weak effective demand remaining a real constraint. While new industries are growing rapidly, their scale is still small, and the bank will need to rely on traditional industries for support over the next one to two years.
Pricing is another unavoidable issue. In the first half, the average yield on corporate loans was 2.91%, compared to 4.45% for personal loans. The challenge for corporate banking is not about achieving scale, but about simultaneously balancing scale, pricing, and client stickiness. What Ping An Bank Co.,Ltd. truly needs is not a longer list of corporate loans, but a cohort of corporate clients who are willing to keep their accounts, settlements, financing, and wealth management with the bank.
Impairment Relief as a Buffer
The engine transition takes time, but retail risk costs have already begun to ease, which helps explain why net profit growth outpaced revenue growth in the first half, though it is not the direct source of the 1.8% revenue increase. In the first half, retail finance's credit and other asset impairment losses fell 5.7% year-on-year to RMB 17.772 billion. The bank's overall NPL generation rate dropped to 1.15%, down 0.49 percentage points year-on-year, and the annualized credit cost fell to 1.10%, a decrease of 33 basis points. As high-risk retail assets continue to be wound down and legacy risks are processed, retail credit impairment losses may continue their gradual decline. This provides an important layer of profit cushioning while the new growth engine is still taking shape.
However, this does not mean the bank's total impairment losses have entered a downward trajectory. In the first half, total credit and other asset impairment losses actually increased 2.5% year-on-year. While retail impairment declined, corporate finance impairment losses rose from RMB 1.095 billion to RMB 2.190 billion. This shift indicates that corporate expansion also carries risk costs, and whether these stem from new lending, legacy projects, industry-specific risks, or model parameter changes will need to be validated in subsequent reports. Meanwhile, the bank's provision coverage ratio fell from 277.63% at the end of 2023 to 219.58%. The decline in coverage alone does not necessarily mean the room for profit recovery is narrowing, but the potential to boost profits through provision releases or impairment changes must be continuously assessed in light of NPL balances, write-offs, provision levels, and regulatory requirements.
Ping An Bank Co.,Ltd. still maintains an efficiency advantage. In the first half, its net interest margin stood at 1.80%, flat year-on-year, which Ji Guangheng said ranks approximately second among joint-stock banks. Additionally, the annualized weighted average return on equity was 10.56%, the annualized average return on assets was 0.86%, and the cost-to-income ratio improved to 27.06%. The bank also continues to lead joint-stock peers in revenue and profit per employee, as well as branch-level output. Vice President Wang Jun summarized the wealth management direction as shifting from "finding clients for products" to "matching products to clients." In the first half, retail client assets under management (AUM) grew 3.8% from the start of the year, while wealth management fee income surged 35.6% year-on-year, driven by strong growth in bancassurance and fund distribution fees. The product mix, market conditions, and client retention behind this fee surge will need further verification through subsequent AUM growth and client base data.
Ping An Bank Co.,Ltd. currently sits at the intersection of two phases. On one hand, the clearing of retail risk assets is expected to continue easing credit costs, supporting profit recovery. On the other, whether corporate finance, enterprise accounts, cross-border services, and wealth management can generate stable income will determine if the "engine switch" evolves from a clear direction into a rebuilt model. What the bank ultimately needs to prove is whether corporate clients can be converted into accounts and low-cost deposits, and further into wealth management and retail client engagement. If this chain works, the engine switch will become a true model rebuild; if not, corporate expansion risks sliding into low-price, low-efficiency homogeneous competition. In an era where all banks are vying for corporate clients, the direction is clear, but whether the growth model can be rebuilt remains to be seen.
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