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File photo. Ping An Bank is still undergoing "transformation." Yang Xue In 2025, Ping An Insurance (Group) Company of China, Ltd. embarked on a remarkable "shopping spree" for bank stocks in the Hong Kong market.
The most recent instance occurred during the final two trading days of 2025. On December 30 and December 31, 2025, Ping An Life Insurance Company of China, Ltd., utilizing funds managed by Ping An Asset Management, increased its stake in both Agricultural Bank of China H-shares and China Merchants Bank H-shares to 20%, triggering the Hong Kong Stock Exchange's disclosure rules.
While Ping An of China was aggressively buying bank shares externally over the past year, the bank incubated within this financial empire—Ping An Bank Co.,Ltd.—faced abandonment by investors. Data from East Money Information shows that in the fourth quarter of 2025, institutional investors including Goldman Sachs Securities, HSBC, and Standard Chartered Bank all reduced their holdings in Ping An Bank.
Source: East Money Information "Why does Ping An Group increase its stake in Agricultural Bank of China but not Ping An Bank?"
An investor raised this question to Ping An of China in September last year. Ping An of China responded, stating: "The relevant investments are financial investments and represent routine operations within the equity investment portfolio of insurance funds. Banking is one of the Group's three core businesses, and the Group will, as always, support Ping An Bank in growing larger and stronger." The equity structure shows that Ping An of China holds a combined 57.95% stake in Ping An Bank through various entities.
However, based on financial reports, the results of this "support" from the major shareholder are not yet visible. As of the third quarter of 2025, Ping An Bank had experienced 12 consecutive quarters of declining revenue, making it one of the poorer-performing joint-stock banks in recent years.
Currently, Ping An Bank's valuation is at its cheapest since 2018. Calculating based on the closing price of 10.86 yuan on February 2, Ping An Bank's price-to-book ratio (PB) fell to 0.47 times (considering the characteristics of banks being asset-heavy, highly leveraged, and slow-growing, PB reflects valuation levels better than PE), significantly lower than the industry average PB of 0.68. This implies investors can become shareholders of this bank, which boasts nearly 6 trillion yuan in total assets, for less than half the price of its net asset value per share (23.08 yuan).
This inevitably raises the question: With the backing of the Ping An of China group, why is Ping An Bank's performance mediocre?
Performance and Ranking YOUNG Finance compilation reveals that before 2022, Ping An Bank was one of the fastest-growing joint-stock banks. From 2013 to 2022, Ping An Bank's revenue grew by 245%, and net profit grew by 199%, far exceeding leading joint-stock banks like China Merchants Bank and Shanghai Pudong Development Bank.
Data source: Financial reports of major listed banks, compiled and charted by YOUNG Finance However, with changes in the macroeconomic environment starting in 2022, banks generally experienced slowing performance, and Ping An Bank's performance declined more significantly than its peers. From 2022 to 2024, Ping An Bank's revenue and net profit attributable to shareholders fell by 18% and 2%, respectively. In contrast, China Merchants Bank's revenue fell by approximately 2% during the same period, Industrial Bank fell by 5%, and Shanghai Pudong Development Bank fell by 9%, all performing better than Ping An Bank.
During the economic downturn, Ping An Bank's performance appears to exhibit greater vulnerability compared to its peers.
A bank's revenue can be broken down into three components: net interest income from credit (including corporate and retail); net fee and commission income from intermediary businesses like remittances and agency sales; and net investment income from financial market operations. Among these, net interest income is the fundamental base, accounting for at least 60% of total revenue.
Since 2023, as the economy has been in a recovery phase, financial institutions have been conceding profits to the real economy, leading to a widespread narrowing of net interest margins for banks, impacting the performance of many. Ping An Bank is one of them—over the two years of 2023 and 2024, its net interest income cumulatively plummeted by 28.2%, becoming the primary reason for the performance decline during these years. Notably, this decline was also larger than that of other leading joint-stock banks.
Data source: Financial reports of major listed banks, compiled and charted by YOUNG Finance The sharp decline in net interest income primarily stems from changes in Ping An Bank's credit structure. Financial reports show that in 2023-2024, Ping An Bank vigorously compressed higher-yielding personal loans while increasing the proportion of lower-yielding corporate loans. This trend continued into the first three quarters of 2025. As of September 30, 2025, the proportion of corporate loans rose from 38.5% at the end of 2022 to 49.4%, nearly catching up with the share of personal loans (50.6%).
Source: Ping An Bank Q3 2025 Financial Report This data offers a glimpse into the sweeping internal transformation Ping An Bank has undergone since 2023. This timing coincides with the change in leadership at the bank. In June 2023, Ji Guangheng assumed the role of President of Ping An Bank and immediately began reducing non-performing retail loans while shifting focus to increasing corporate investment. Simultaneously, the decade-old divisional structure was abolished, replaced by a strategy to strengthen branches, with headquarters providing support, enabling branches to seize potential opportunities on the front lines.
This represents the most significant strategic adjustment since Ping An Bank's retail transformation in 2016 and is also the bank making the most substantial changes in response to the current industry downturn.
Now in the third year of this transformation, Ping An Bank has yet to show signs of performance improvement. In the third quarter of 2025, revenue decreased by 9.2% year-on-year, and net profit fell by 2.8%. The persistently low stock price over the past two years indicates that many of Ping An Bank's investors are losing patience and voting with their feet.
Aggressive Expansion Backed by the Group Ping An Bank's stock code is 000001.SH. The former owner of this code, Shenzhen Development Bank Co., Ltd. (hereinafter "SDB"), was the first bank listed in China.
In 2003, Ping An of China Group acquired Fujian Asia Bank and renamed it Ping An Bank. It subsequently acquired Shenzhen City Commercial Bank and merged it with Ping An Bank. In 2010, it acquired a majority stake in SDB, and in 2012, achieved a backdoor listing through SDB absorbing Ping An Bank, marking the beginning of a stable development phase for Ping An Bank. Unlike many banks established earlier that have weathered several economic cycles, Ping An Bank, which developed through several mergers and acquisitions, perhaps needs to "prove itself" more diligently.
Simultaneously, after the move to merge with SDB, Ping An Bank became the first bank in China controlled by insurance capital, and its importance within Ping An Group's vast financial ecosystem became increasingly prominent. In 2016, driven by the Ping An Group, Ping An Bank's management underwent a "major reshuffle," with Xie Yonglin, who was "parachuted in" from the group headquarters at the time, assuming the role of Chairman.
Xie Yonglin, also a former Ping An insurance sales agent, made his first task upon taking office to formulate the strategic goal of a "comprehensive transformation into a retail bank": "Leveraging the comprehensive financial advantages of Ping An Group, complete the migration of the Group's customers within 3 to 5 years, increasing the bank's customer base to 110 million, and build Ping An Bank into China's best retail bank."
In 2015, Ping An Bank had only 23 million retail customers; aiming to quintuple that number within five years was undoubtedly an aggressive target. Subsequently, Ping An Bank seemed to "inherit" the performance-oriented and "wolf culture" genes of the Ping An Group. From 2016 to 2021, Ping An Bank's retail loan balance surged dramatically, with growth reaching 499%, far exceeding the同期 growth rate (91%) of the "retail king," China Merchants Bank, ranking first among joint-stock banks.
Source: Western Securities Behind such dazzling results was the indispensable support of Ping An of China—the Group's massive retail customer base was akin to a gold mine for Ping An Bank. At that time, many customers of Ping An Life Insurance or auto insurance could apply for credit cards simply by presenting a valid policy. According to financial reports, the customer migration platform established by Ping An Bank contributed a significant number of new retail customers, accounting for over 40% of new customer growth for two consecutive years in 2016-2017.
In terms of direct benefits, the retail transformation was successful before 2021. From 2020 to 2021, the average annual proportion of retail loan balance to total loan balance exceeded 60%, ranking first among joint-stock banks (China Merchants Bank, in second place, had a retail loan proportion of 53%). Concurrently, Ping An Bank's yield on interest-earning assets also consistently ranked first among joint-stock banks, reaching 4.95% in 2021 (0.34 percentage points higher than second-place Zhejiang Chouzhou Commercial Bank and 0.97 percentage points higher than China Merchants Bank).
Ping An Bank not only boosted its performance but also its valuation—from 2016 to 2021, its market capitalization soared from less than 100 billion yuan to a peak of 485.3 billion yuan, an increase of nearly five times.
However, what these figures concealed was that, unlike China Merchants Bank, where mortgages accounted for nearly half of personal loans, a large portion of Ping An Bank's retail loans were concentrated in credit cards and other personal consumption loans (credit card receivables balance accounted for one-third in 2021).
These high-risk, high-return products, on one hand, pushed up Ping An Bank's personal loan yields, elevating the overall loan yield level. But because the credit card customer base is generally more sub-prime compared to retail mortgage borrowers and more sensitive to risk, they are also more prone to bad debts during an economic downturn. After 2021, the non-performing loan ratio for Ping An Bank's retail credit increased noticeably, rising from 1.21% to 1.39% in 2024 (China Merchants Bank's was only 0.96% in 2024).
From 2022 to 2024, Ping An Bank's credit impairment and other asset impairment losses were 71.36 billion yuan, 59.09 billion yuan, and 49.43 billion yuan, respectively, with impairment losses from retail business accounting for a high 64.2%, 100%, and 98.5% of these amounts.
"We have suffered from moving too fast, so we need to learn from past mistakes and have determination," Ji Guangheng stated at the performance conference in March 2025. In 2024, Ping An Bank achieved a pre-tax profit of 54.738 billion yuan, of which the retail segment contributed only 356 million yuan, accounting for less than one percent of the profit contribution.
Bancassurance Fails to Become a Major Force Compared to other joint-stock banks, another advantage for Ping An Bank, backed by insurance capital, is its bancassurance business. Ping An of China was the first company in China to venture into bancassurance. After Ping An Bank became a subsidiary, it also began serving as a "sales channel" for Ping An insurance products.
In August 2015, Ping An Bank launched its "Insurance Supermarket" service. Subsequently, in 2021, aligning with the life insurance reform initiated by Ping An Group in June 2020, Ping An Bank proposed a new bancassurance strategy and began building a team of "wealth advisors proficient in insurance" (known as "Ping An Wealth Advisor PWA"). This team specialized primarily in selling life insurance, alongside other financial products.
In December 2022, Fang Zhinan, President of the Insurance Finance Department at Ping An Bank, also stated in an interview that they would vigorously develop the new Ping An bancassurance model, clearly positioning "wealth management" as the direction for transformation, aiming for intermediary business income from bancassurance to become a significant source.
This transformation also faced setbacks—first, the new bancassurance team started strong but then declined. The number of employees in this team reached 2,500 in the third quarter of 2023. However, in the 2023 annual report, terms like "new team," "private bankers," or "PWA" disappeared. It wasn't until the 2025 interim report that it was revealed this team had been merged with the original wealth management team into a single unit.
Then, in the second half of 2023, policies began tightening with "unified reporting and implementation," strictly controlling handling fees, directly impacting banks' insurance agency sales businesses. In 2024, income from agency sales of insurance continued to plummet by 71.8%.
It wasn't until 2025 that the bancassurance business began to recover—agency insurance income surged by 46.1% year-on-year in the first half of 2025, and the growth rate further climbed to 48.7% in the third quarter. In September 2025, Guo Xiaotao, Co-CEO of Ping An of China, expressed continued optimism about the future growth rate of the bancassurance channel in an interview.
Despite the encouraging growth rate, in absolute terms, the revenue from insurance agency sales remains a drop in the bucket compared to Ping An Bank's total revenue. Ping An Bank's income from selling insurance in the first three quarters of 2025 already exceeded the full-year amount from the previous year, reaching 1.237 billion yuan, while the total revenue for the same period was 100.668 billion yuan. Although Ping An Bank has long been called the "insurance bank," its agency insurance income contributes only about 1% to its revenue.
From Ping An Bank's revenue structure, it is evident that the proportion of fees and commissions first increased and then decreased since its backdoor listing in 2012 and deep integration with its parent company, hovering around 20% over the past five years.
Data source: Ping An Bank历年财报, compiled and charted by YOUNG Finance This proportion is higher than many joint-stock banks but still lower than China Merchants Bank, whose fee and commission revenue share has remained almost consistently above 25% over the past five years.
The Next Step for Performance At the Ping An Bank 2025 interim results conference, President Ji Guangheng stated, "The retail business has passed through the most difficult and gloomy period and is currently in a climbing phase. The earlier reforms have laid a good foundation for the retail business to take off and develop again."
As of the third quarter of 2025, Ping An Bank's non-performing loan formation rate had declined for six consecutive quarters; the personal loan non-performing ratio also dropped from 1.39% at the end of 2024 to 1.24%, indicating stabilizing不良 data. Looking solely at these indicators, one might easily conclude that the risk clearance in the retail business is nearing its end.
However, when considering the situation with special mention loans (seen as a reservoir for non-performing loans) comprehensively, it becomes apparent that Ping An Bank's asset quality remains concerning—the proportion of special mention loans (the special mention ratio) increased significantly from 1.11% in 2020-2024 to 1.93%, retreating to 1.76% in the first half of 2025 but still at a high level (China Merchants Bank was at 1.43%). As of the end of June 2025, the migration rate of Ping An Bank's special mention loans was 37.4%, meaning 37.4% of the special mention loans in the current period flowed into the non-performing loan category.
Data source: Ping An Bank历年财报, compiled and charted by YOUNG Finance Since 2023, Ping An Bank has begun shifting its focus to corporate business to compensate for the decline in retail business. However, the corporate business sector is already a fiercely competitive "red ocean," with high-quality customers concentrated among the Big Four banks. Furthermore, other joint-stock banks like China Merchants Bank, Industrial Bank, and China CITIC Bank have relatively stronger积累 in corporate business compared to Ping An Bank, making it challenging for Ping An Bank to strengthen its corporate operations.
As of the end of September 2025, the non-performing loan ratio for Ping An Bank's corporate real estate loans was 2.20%, up 0.41 percentage points from the end of the previous year, indicating a deterioration in the asset quality of corporate loans as well. The 2025 interim report also showed that the balance of restructured loans (i.e., loans with adjusted interest rates or terms to avoid default, primarily corporate loans) increased by 1.6%, mainly affected by the real estate sector. Extending the timeline reveals that Ping An Bank's restructured loan balance has actually been rising since 2021.
Source: Ping An Bank 2025 Interim Report Ping An of China has been called the "largest hidden landlord" by the capital market due to its significant exposure to property-related investments, and its subsidiary, Ping An Bank, can hardly avoid being affected. Ping An Bank had previously helped Ping An Real Estate sell its perpetual bonds and trust products through private placements, as well as providing related-party credit facilities to other companies within the Ping An Group. On January 23, Ping An Bank issued an announcement indicating it would increase and renew credit lines for related parties including Ping An Securities and Ping An of China, totaling 24.6 billion yuan.
As one of the three core segments of Ping An of China, Ping An Bank has consistently been a profit growth engine for the Group. Although Ping An Bank's revenue declined by 8.4% and profit微增2.2% in 2023, it was still the Group's only segment showing positive growth, contributing nearly one-quarter of the profits that year.
Data source: Ping An Bank历年财报, compiled and charted by YOUNG Finance Interestingly, in 2023, the very year the parent company's profits fell significantly, Ping An Bank substantially increased its dividend payout ratio to 32%, surpassing the previous cash dividend payout level of 10-15%. The total dividend amount reached 13.953 billion yuan, setting a record high in the bank's history. A rough calculation suggests Ping An of China received approximately 8 billion yuan from this dividend.
During the 2016零售转型, Ping An Bank could still leverage the "comprehensive finance"流量 of the Ping An Group and the tailwind of an upward economic cycle. But now, as it attempts to revitalize itself on the corporate business track, it coincides with an economic downturn. Ping An of China itself is also dealing with property-related risks and seeking quality assets externally, unable to provide Ping An Bank with the same level of support as before.
Ping An Bank's second transformation is destined to be a more solitary self-revolution. Before emerging from the trough, that "high dividend" might have become the greatest certainty in the eyes of investors.■
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Responsible Editor: Yang Hongbo
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