Revenue and net profit decline for two consecutive years, Ping An Bank's interest margin narrows its decline, and retail stabilizes.

Interest income continues to decline, while non-interest income turns from growth to decline. Ping An Bank’s net profit for 2025 is still under pressure.

In a late-March 20 disclosure of its 2025 annual report, Ping An Bank (000001.SZ) showed that last year’s operating income and net profit (net profit attributable to the bank’s shareholders, the same applies below) continued to fall year over year by 10.4% and 4.2%, respectively. Compared with the prior year, the decline in its operating income narrowed somewhat, while the decline in net profit was basically flat.

A further cut to the Loan Prime Rate (LPR) and the contraction of interest income caused by insufficient effective demand remain the main factors affecting revenue and profit. For the full year last year, the bank’s net interest income and net non-interest income fell year over year by 5.8% and 18.5%, respectively.

However, positive factors have also emerged. Last year, the bank’s net interest margin declined by 9 basis points, with the drop significantly narrowing by 42 basis points compared with 2024. In addition, the retail business—currently in a period of adjustment pains in recent years—has also shown signs of stabilizing after a downturn, with the scale of net profit increasing significantly versus the prior year.

Net interest margin decline narrows

According to the annual report, as of the end of 2025, Ping An Bank’s total assets were approximately 5.93 trillion yuan, up 2.7% year over year; its deposits and loan balances were 3.58 trillion yuan and 3.39 trillion yuan, respectively, up 1.4% and 0.5% year over year.

Compared with the prior year, the bank’s operating income continued to decline last year, but the rate of decline narrowed, while the rate of decline in net profit was basically flat.

For the full year, the bank achieved operating income of 131.44 billion yuan, down 10.4% year over year; it achieved net profit of 42.63 billion yuan, down 4.2% year over year. In 2024, the bank’s revenue and net profit declined by 10.9% and 4.2%, respectively.

The year-over-year decline in revenue and profit is related to the downturn in non-interest income. Last year, the bank’s non-interest net income was 43.421 billion yuan, down 18.5% year over year. In the prior year, this figure was 53.268 billion yuan, representing growth of 14%.

The largest decline was in other non-interest net income, with a total scale of 19.527 billion yuan, down 33% year over year. Ping An Bank explained that this was mainly due to market volatility in 2025, which led to lower non-interest net income from bond investment and other businesses. Among them, the largest decline was in fair value changes and investment income/losses, with a floating loss of 2.518 billion yuan, down 181.1% year over year.

Compared with non-interest income—the factor that impacts performance the most—interest income remains the key driver. The annual report shows that for the full year last year, the bank’s interest income was approximately 169.86 billion yuan, down 14.4% year over year. Of that, deposit interest income was 130.5 billion yuan, down 15.4% year over year, which caused the bank’s net interest income to fall 5.8% year over year to 88.021 billion yuan in the prior year.

The main reasons for the decline in interest income also come from the narrowing of the net interest margin. In 2025, the bank’s average loan yield was 3.87%, down 67 basis points year over year. The average yields for corporate and personal loans were 3.05% and 4.79%, respectively, down 51 and 77 basis points year over year, respectively.

In response, Ping An Bank explained that this was due to: first, the bank increased credit support for key industries, regions, and customers, improved the proportion of high-quality customer segments, and continuously optimized customer mix and asset structure; and second, the Loan Prime Rate (LPR) was cut, and because effective credit demand was insufficient, the interest rates on newly issued loans continued to trend downward. This, combined with the impact of adjustments to existing mortgage loan interest rates and repricing-related factors, resulted in a year-over-year decline in loan yields.

Meanwhile, in 2025, the bank’s interest expense was 81.84 billion yuan, down by about 23.1 billion yuan year over year, a decline of 22%. Deposit interest expense decreased from 72.3 billion yuan in the prior year to 59.4 billion yuan, down nearly 13 billion yuan, a decline of 17.9%. The average cost rate on interest-bearing liabilities was 1.67%, down 47 basis points year over year; the average deposit cost rate was 1.65%, down 42 basis points year over year, but both were lower than the magnitude of the decline in loan yields.

Under these circumstances, the bank’s net interest margin and net interest spread also declined by 0.09 and 0.07 percentage points, respectively, year over year, to 1.78% and 1.76%.

The bank expects that, against the backdrop of asset repricing and support for the real economy, the net interest margin will still face downward pressure, but the extent of the decline is expected to ease. It will continue to strengthen asset-liability portfolio management, refine pricing management, provide forward-looking guidance, and mitigate the downward trend in the net interest margin. On the asset side, it will continue to focus on major asset allocation, encourage high-quality credit deployment; at the same time, it will strengthen market research and make flexible allocations of interbank assets to improve the efficiency of funds utilization. On the liability side, it will focus on guiding the intake of low-cost deposits, manage high-cost deposits, and work to control and reduce the overall cost of liabilities.

However, positive factors have also appeared. The bank’s net interest margin decline last year has already become noticeably slower. In 2024, the bank’s net interest margin and net interest spread were 1.87% and 1.83%, respectively, declining by 0.51 and 0.48 percentage points compared with 2023.

Retail profit stabilizes after a downturn

After more than two years of adjustment, Ping An Bank’s retail business has shown signs of bottoming out and stabilizing.

According to the annual report, for the full year last year, the bank’s retail business generated operating income of 61.26 billion yuan, provision-before impairment operating profit of 40.83 billion yuan, total profit of 3.22 billion yuan, and net profit of 2.68 billion yuan. Compared with the prior year, the latter two metrics increased by 2.864 billion yuan and 2.394 billion yuan, respectively, with both year-over-year growth rates exceeding 800%. Their share in total net profit rose from 0.6% to 6.3%.

This change is mainly due to a decline in the scale of asset impairment. Last year, the bank’s retail credit and other asset impairment losses totaled 37.57 billion yuan, down nearly 11.2 billion yuan year over year, from 48.7 billion yuan in the prior year—a drop of more than 22%.

In addition, the bank’s personal loan non-performing loan ratio also fell from 1.39% at the end of 2024 to 1.23% at the end of last year, down 0.16 percentage points year over year. Besides operating loans, the non-performing loan ratios for personal housing mortgages, credit cards, consumption loans, and other loan types fell by 0.19, 0.32, and 0.23 percentage points year over year, respectively.

Wealth management income in the retail business also grew impressively. For the full year last year, Ping An Bank’s wealth management fee income was 5.06 billion yuan, up 15.8% year over year; of which, agency personal insurance income was 1.292 billion yuan, up 53.3%; agency personal wealth management income was 1.287 billion yuan, up 8.8%; and agency personal fund income was 2.29 billion yuan, up 8.9%.

The annual report shows that Ping An Bank’s asset quality continued to improve slightly. As of the end of last year, the bank’s non-performing loan ratio was 1.05%, down 0.01 percentage points year over year; the non-performing loan generation rate was 1.63%, down 0.17 percentage points year over year.

In the same period, the bank’s loans under watch and overdue loan ratios also declined. As of the end of last year, its loans under watch ratio was 1.75%, down 0.18 percentage points from the end of the prior year; the overdue loan ratio was 1.34%, down 0.18 percentage points from the end of the prior year. The deviation of loans overdue by more than 60 days and 90 days was 0.67 and 0.56, respectively. For the full year, it accrued credit and other asset impairment losses of 40.56 billion yuan, down 17.9% year over year.

Ping An Bank said this is mainly because the overall macroeconomy has been moving steadily in a better direction, while the bank has continued to optimize its business structure and strengthen efforts to recover non-performing assets. The risk control outcomes for large-account borrowers have been effective, and the bank’s overall impairment accruals have decreased. Among them, the total amount recovered from non-performing assets was 36.798 billion yuan, including principal amounts of non-performing assets already written off of 19.11 billion yuan; and 97.2% of the recoveries were made in cash.

A wealth of information and precise interpretation—exclusively on the Sina Finance app