At the 2026 interim results conference held on August 17, Ping An Bank President Ji Guangheng described the bank's current state as "recovering from a major illness." During the first half of 2026, the bank's operating revenue and net profit halted their decline for the first time in three years. Although revenue has yet to return to levels seen five years ago, net profit reached RMB 25.696 billion, a year-on-year increase of 3.32%.
Ji Guangheng was appointed president of Ping An Bank in June 2023, succeeding Hu Yuefei, who retired upon reaching the age limit, with his qualification approval taking effect that November. At his debut interim results conference in 2023, Ji stated that a change in leadership should not mean a change in strategy. At that time, Ping An Bank was aggressively advancing its retail banking transformation. This reform strategy, initiated in 2016, had initially yielded dividends, but by 2023, the problems stemming from rapid expansion had begun to surface. The once-star bank has experienced considerable frustration over the past three years, with operational performance declining year after year and investors losing confidence. Ping An Bank's share price has halved from its 2021 peak, and its performance during the recent three-year banking sector rally ranked at the bottom among major large-cap banks. Has Ji Guangheng successfully navigated Ping An Bank out of the storm after three years at the helm?
Retail Business Contributes Less Than 10% of Profits
Breaking down Ping An Bank's 2026 interim report, the retail finance segment contributed 44.7% of operating revenue but only 8.4% of net profit, while the wholesale finance segment contributed 72.9% of net profit. For a bank that has been transforming into a retail bank for a decade, this situation is rather awkward. At the results conference, Ji Guangheng noted that during periods of economic pressure, corporate banking serves as an excellent product to weather the cycle. Ping An Bank has promptly adjusted its strategy to balance retail and corporate banking operations. Since proposing the retail banking transformation in 2016, retail finance once brought Ping An Bank high interest margins and high profits. The revenue and profit contributions of retail finance rose from 30.59% and 41.22% in 2016 to 59.0% and 63.4% by 2020. Thanks to retail finance, Ping An Bank's net interest margin reached 2.79% in 2021, ranking first among joint-stock banks. Between 2019 and 2021, the achievements of Ping An Bank's retail transformation were widely recognized by the capital markets, with its share price surging 254% during that period. Beneath the surface of this success, however, undercurrents were stirring.
In 2022, while retail finance still contributed 57.3% of operating revenue, its net profit contribution plummeted to 43.6% from 59.2% the previous year. The primary drag was a significant increase of RMB 9.426 billion in credit impairment losses for retail assets. Ping An Bank noted that due to the macroeconomic environment, retail business revenue growth slowed and asset quality came under pressure, prompting the bank to increase provisions and write-offs for retail assets. Specifically, the non-performing loan ratio for Ping An Bank's "New Loan" product rose from 1.01% the previous year to 1.31% in 2022, while the credit card NPL ratio increased from 2.11% to 2.68%. By 2023, when Ji Guangheng took office, the situation had become even more severe. Although retail finance still contributed 58.4% of operating revenue, its net profit contribution plunged to 11.9%. That year, credit impairment losses in the retail finance segment reached RMB 59.131 billion, almost completely eroding the segment's profits. Ji Guangheng pointed out that Ping An Bank's past operational strategy was characterized by high funding costs, high risk, and high pricing, which led to high interest margins. However, some products with interest rates exceeding 10% are now not profitable after comprehensive calculation, which he described as "very alarming." He further remarked at the 2023 annual results conference that "in a downward economic cycle, moving downmarket with clients is very dangerous."
Organizational and Personnel Restructuring
Ji Guangheng has extensive experience in the banking industry. Before joining Ping An Group in 2020, he served as chairman of Shanghai Rural Commercial Bank, vice president of Shanghai Pudong Development Bank, and vice president of ICBC's Beijing branch. After joining Ping An Group, he also concurrently served as chairman of Lufax, which primarily serves the credit needs of small and micro clients beyond traditional banks, giving him a deeper understanding of the costs and returns of high-risk retail lending. In the second half of 2023, an organizational restructuring was launched. Ping An Bank abolished the industry-focused business divisions that had existed for nearly a decade, merging the six major industry divisions into a strategic client department. In the retail segment, in addition to disbanding divisions, it also eliminated the retail business management departments for the eastern, northern, and southern regions. Ji explained that the divisional system has significant drawbacks for industries with high volatility and strong cyclicality. For example, the photovoltaic division felt compelled to issue loans simply because it existed each year. Some banks' real estate divisions ultimately inflicted severe damage on the bank. Furthermore, given significant regional differences and intensified homogenized competition, frontline units need more decision-making power. These were the primary considerations behind Ping An Bank's decision to dismantle the divisional system and strengthen its branches.
During this period, Ping An Bank also strategically adjusted its personnel, with retail line changes being particularly critical. In early 2024, Cai Xinfa, the bank's special assistant to the president overseeing retail business, departed, and was replaced by Zhang Zhaohui, the former Shanghai branch general manager. By March 2025, Zhang Zhaohui, in his role as assistant to the president, also took on the position of Shenzhen branch general manager, while Wang Jun, the former Shenzhen branch general manager, was promoted to assistant to the president at headquarters, overseeing retail operations. Ji Guangheng explained that Wang Jun, born in the 1970s, had served as the head of four local branches and had demonstrated a proven ability to overcome difficulties. He was brought to headquarters to leverage his youthful energy and strong strategic execution. The Shenzhen branch is Ping An Bank's largest revenue generator, and Zhang Zhaohui's concurrent role was intended to better utilize his experience as a veteran to secure this key stronghold. On August 14 of this year, Wang Jun was appointed vice president (pending regulatory approval), marking the first time in a decade that the retail line has had a senior executive at the vice president level. The market interprets this as a sign that Ping An Bank's retail business has stabilized and the reform is taking effect. Additionally, after former vice president Guo Shibang was transferred to Ping An Group in late 2023, the risk management line was taken over by assistant president Wu Leiming, who was appointed vice president in March this year. Fang Weihao, former chairman of Ping An Trust, was appointed vice president in March 2025, overseeing corporate and cross-border business. Vice President Yang Zhiqun no longer oversees corporate business and has instead taken on the role of Beijing branch general manager. With these changes, the executive adjustments initiated since Ji Guangheng took office have largely been finalized, ensuring the new strategy can be efficiently implemented.
Retail Loan Reduction Exceeds RMB 200 Billion to Stop the Bleeding
Since 2022, the banking industry has been reducing fees and yielding profits to support the real economy, and the Loan Prime Rate has also undergone intensive cuts. Net interest margins across the banking sector have continued to narrow. In the past, when loan pricing decreased, banks typically increased loan volume to compensate for lower prices. However, such an approach now is akin to drinking poison to quench thirst. Shortly after taking office, Ji Guangheng pointed out that the key to future profit growth lies on the cost side, including reducing risk costs and non-risk costs. Ping An Bank would release cost management space by improving the precision of its management. This implies that the expansion path based on scaling up credit is no longer viable; with limited "income expansion" opportunities, the focus must shift to "cost reduction." Retail credit risk has taken center stage. Ping An Bank has aggressively reduced its high-risk personal loans, building on a reduction of RMB 69.671 billion in 2023 by slashing an additional RMB 210.551 billion in retail loan balances in 2024. The bank stated that some individual clients' repayment capabilities continue to face pressure, with the NPL ratio for personal loans rising from the beginning of the year. The bank proactively adjusted its customer and asset structure, resolutely cutting high-risk businesses within personal loans. Given the intensity of these adjustments, Ji Guangheng stated in April 2025 that Ping An Bank had "stopped the bleeding" in its retail business, but that "hematopoiesis will take time." The retail reform has entered a critical phase. The structure of Ping An Bank's retail loans has shifted, with low-risk residential mortgage balances continuing to grow, while credit card receivables, consumer loans, and operating loans have been reduced. The proportion of collateralized loans increased from 56.4% in mid-2023 to 62.2% in mid-2026. During the same period, many banks experienced declining mortgage balances due to early repayments and limited new demand, leading to a marked increase in retail loan risk. Thanks to the early shift in retail credit strategy, Ping An Bank's personal loan NPL ratio improved from 1.37% at the end of 2023 to 1.23% by the end of 2025, indicating better risk control, and remained stable in the first half of 2026.
With lending rates continuously declining, reducing deposit interest costs has become a consensus among bank presidents to protect profits. At the 2023 annual results conference, Ji Guangheng openly expressed envy for China Merchants Bank, noting that its liability costs were 60 basis points lower than Ping An Bank's. This advantage stems from China Merchants Bank's years of cultivating retail clients, providing it with a larger and more stable source of low-cost deposits. Financial reports show that as of the end of 2023, China Merchants Bank's total deposits reached RMB 8.16 trillion, with an average deposit cost rate of 1.56%. During the same period, Ping An Bank's deposits totaled RMB 3.41 trillion, with an average cost rate of 2.20%. This means that for the same scale of deposits, China Merchants Bank could save RMB 21.824 billion in annual interest expenses compared to Ping An Bank, an amount equivalent to half of Ping An Bank's annual net profit. Ping An Bank has begun to intensify efforts to attract low-cost deposits and increase the proportion of demand deposits by expanding scenarios such as public-private linkage, platform-based customer acquisition, and payroll distribution. Combined with the repricing effect of maturing loans, the bank's deposit interest payment rate fell to 1.38% in the first half of 2026. Ping An Bank has also become increasingly frugal with its operating and administrative expenses, reducing office and daily operational costs. Ji Guangheng mentioned that the bank is promoting branch downsizing, adjusting to a "small first floor, large second floor" layout, as first-floor rents are high but foot traffic is declining, leading to significant waste. Between 2023 and 2025, Ping An Bank's operating and administrative expenses were cumulatively reduced by nearly RMB 11.2 billion.
Is a "Recovering" Ping An Bank Still a Worthy Investment?
In 2023, Ping An Bank raised its dividend payout ratio from its previous level of no more than 15% to 30%, which then eased to 26.51% and 27.13% in 2024 and 2025, respectively. The interim dividend payout ratio for 2026 stands at 18.8%. Based on the latest interim dividend, the current dividend yield is approximately 4.36%, down from 5.30% at the end of 2025. When discussing the dividend increase, Ji Guangheng admitted that the bank had "owed investors" due to past capital adequacy constraints, expressing embarrassment. He added that the subsequent reduction in the payout ratio was due to short-term operational pressure and hoped the market would understand. The bank will "do its best" on dividends while "acting within its means." Honesty and a willingness to confront issues have shaped investors' perception of Ji Guangheng. However, the capital markets remain unforgiving. Since 2023 (as of the close on August 21), the high-dividend strategy has been highly favored, with the average cumulative gain for the 42 listed banks reaching 58.22%, significantly outperforming the broader market. Large state-owned banks, characterized by stable performance and high dividend certainty, performed strongly with an overall increase of 79.65%, with Agricultural Bank of China leading the pack at 183.16%. In contrast, Ping An Bank's share price has remained nearly flat, rising only 5.78%, ranking it third from the bottom among the 42 listed banks. Furthermore, since its peak in May 2021, Ping An Bank's share price has been cut in half, disappointing the 450,000 shareholders holding the bank's stock.
The operating environment for the banking industry has also fundamentally changed. "The days of banks returning to a period of aggressive expansion and rapid profit growth will not return anytime soon," Ji Guangheng candidly stated at the 2026 interim results conference. This is also a consensus among bank presidents. The industry's net interest margin has been on a downward trajectory since 2022, falling to 1.41% by the second quarter of 2026, where it stabilized for the first time, albeit still at historic lows. The era of double-digit revenue and profit growth for banks is now a distant hope. In early 2026, Ping An Bank set its business objective as "returning to growth." After halting the decline in revenue and net profit in the first half, has Ping An Bank truly stabilized? At the results conference, vice president Xiang Youzhi mentioned positive signs in the first half: the net interest margin has stabilized and rebounded, and retail loans are showing initial signs of stabilizing. However, pressure on future loan volume growth and pricing remains. "We can't expect someone recovering from a major illness to immediately compete with the top students. This process is more about gathering momentum, taking it slow, and building our internal strength," Ji Guangheng remarked. Can a "recovering" Ping An Bank win back investor confidence?
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