After two consecutive years of declining revenue and profit, Ping An Bank Co.,Ltd. appears to be showing early signs of progress five months after executives declared a return to growth by 2026. In the first half of this year, the bank reported operating revenue of RMB 70.617 billion, up 1.8% year-on-year, while net profit reached RMB 25.696 billion, an increase of 3.3%. During the 2026 interim results conference held on August 17, senior management spent two hours addressing market concerns over earnings sustainability, net interest margin trends, and the performance of both retail and corporate banking operations. Key themes emerging from the briefing included a return to growth, stabilizing interest margins, and a shift between old and new growth drivers.
Bank executives emphasized that the growth they pursue is not one driven by simple scale expansion or relaxed risk controls, but rather profitable growth that is high-quality, sustainable, and resilient across economic cycles. Additionally, Ping An Bank Co.,Ltd. unveiled its latest dividend plan, distributing RMB 2.49 per 10 shares (tax included) to ordinary shareholders, representing a payout ratio of 20.02% of net profit attributable to ordinary shareholders in the consolidated statement.
Return to growth in H1: How sustainable is the performance?
"The toughest period is behind us, and 2026 will mark our return to growth." This was the message delivered by Ping An Bank Co.,Ltd. executives during the 2025 annual results conference in March. Since then, the bank's performance has shown signs of recovery. In the first half, operating revenue climbed 1.8% to RMB 70.617 billion, while net profit rose 3.3% to RMB 25.696 billion. At the interim briefing, the sustainability of this "return to growth" became a focal point for investors.
Executives candidly acknowledged that after years of adjustment, the era of aggressive expansion and rapid profit growth in the banking sector is unlikely to return in the short term. "Over these years, Ping An Bank Co.,Ltd. has largely managed to control risks, with legacy risks essentially cleared and no new risk clusters emerging. At the same time, we have tightened cost controls, including interest-bearing and risk costs, and pursued higher quality and productivity per unit. In recent years, our productivity metrics have ranked among the top joint-stock banks," executives noted. They added that this demonstrates the company's strategy has remained sound, the workforce has embraced this approach, and improvements in team alignment, customer enhancement, and operational philosophy are vital to future sustained growth.
How will this be executed? Executives explained that the operating side primarily comprises net interest income and non-interest income. On net interest income, the net interest margin stabilized and improved in the first half, with retail loans also showing signs of stabilization, laying a solid foundation for the future. On non-interest income, wealth management will be a key focus, while on the cost side, the bank aims to manage expenses and risk costs to maintain steady overall profit growth.
In the first half, Ping An Bank Co.,Ltd.'s net interest margin stood at 1.80%, unchanged from the same period last year and up 2 basis points from the full year 2025. However, net interest income still declined 0.5% year-on-year to RMB 44.288 billion. In its interim report, the bank noted that looking ahead to the second half, asset-side repricing and the impact of supporting the real economy will persist, while the pace of repricing on existing deposits slows, suggesting continued pressure on the net interest margin.
On non-interest income, the figure reached RMB 26.329 billion in the first half, up 5.8% year-on-year, accounting for 37.28% of operating revenue, an increase of 1.42 percentage points. Within this, net fee and commission income rose 3.7% to RMB 13.214 billion, with agency and entrusted fee income surging 27.6% to RMB 3.986 billion, primarily driven by higher wealth management fee income from agency sales of personal insurance and funds. Other non-interest income grew 8.0% to RMB 13.115 billion.
Moving beyond single-product scale growth: Optimizing AUM structure in H2
Retail business development was also a key investor focus at the interim briefing. The half-year report shows retail operations encompass both wealth management and lending. Within the wealth management segment, private banking is particularly noteworthy. As of the end of June 2026, Ping An Bank Co.,Ltd. served 1.5279 million wealth management clients, up 2.4% from the start of the year, including 110,900 private banking clients, a 5.0% increase. Private banking client AUM reached approximately RMB 2.11 trillion, up 6.0% from the beginning of the year.
Notably, revenue from agency sales of personal insurance and funds in the first half reached RMB 1.007 billion and RMB 1.525 billion respectively, surging 51.2% and 45.1% year-on-year. Regarding the wealth management business, executives stated that opportunities and challenges coexist. On one hand, residents' wealth management demand continues to expand; on the other, increased market uncertainty demands higher professional capabilities.
"In the second half, Ping An Bank Co.,Ltd. will further optimize its AUM structure to achieve profitable AUM growth, rather than pursuing scale growth alone or AUM expansion without corresponding benefits," executives said. They outlined three priorities for the second half: customer-demand orientation, continued professional capability building, and deepening the differentiated positioning of bancassurance. Executives further noted that the focus is shifting away from single-product or point-in-time scale growth toward overall client scale development. "The bancassurance business is our core competitive advantage in wealth management. Leveraging Ping An's ecosystem resources, we will continue to strengthen its sustained growth and maintain our competitive edge."
On the lending side, as of the end of June 2026, Ping An Bank Co.,Ltd.'s retail loan balance stood at approximately RMB 1.73 trillion, roughly flat from the start of the year. However, the structure reveals declines across the board, with only residential mortgage balances up 2.4% from the start of the year. Credit card receivables, consumer loans, and operating loans all decreased, while the number of active credit card accounts fell 1.9% to 42.8521 million. Executives acknowledged, "Our credit card business does face pressure, but based on internal data, it still ranks second in the market. Even so, overall credit card non-performing levels remain relatively high, and that is our primary pressure point."
Corporate real estate exposure declines; stabilizing old drivers and fostering new ones take center stage
On the corporate side, as of the end of June 2026, Ping An Bank Co.,Ltd.'s corporate deposit balance was approximately RMB 2.37 trillion, up 3.2% from the start of the year, while corporate loans stood at approximately RMB 1.73 trillion, up 3.7%. Regarding the closely watched real estate risk, the interim report shows that as of the end of June 2026, the total balance of credit-risk-bearing real estate exposures, including actual and contingent credit, self-operated bond investments, and self-operated non-standard investments, amounted to RMB 243.445 billion, a decrease of RMB 7.912 billion from the start of the year.
Of this, credit-risk-bearing property-related business mainly comprised corporate real estate loans of RMB 198.386 billion, down RMB 11.795 billion from the start of the year. Development loans totaled RMB 59.262 billion, representing 1.7% of total loans and advances, all secured with effective collateral at an average loan-to-value ratio of 45.4%, with 99.0% distributed across first- and second-tier cities, the Greater Bay Area, and the Yangtze River Delta region.
At the interim briefing, executives noted that China's corporate banking sector is in a period of transitioning between old and new growth drivers. Currently, Ping An Bank Co.,Ltd. is steadily advancing in 12 industries, including semiconductors and energy storage, with net additions of RMB 31.6 billion in the first half, a growth rate of 22.2%, accounting for 25% of total corporate business net growth in the period.
"Looking ahead, this transition period between old and new drivers is expected to persist for some time, perhaps one to two years. Therefore, in the second half, our focus will be on stabilizing the old while fostering the new," executives said. Stabilizing the old involves actively maintaining traditional growth drivers while identifying new opportunities within them, such as in urban operations, energy and power, and transportation, where traditional drivers are also undergoing upgrades. Seizing these opportunities can secure the fundamentals. Fostering the new involves building a pipeline of industries and investing in emerging fields to accelerate the growth of new drivers.
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