Ping An Bank Research and Analysis (As of Q3 2025, No Trading Recommendations)

I. Profitability Performance
In the first three quarters of 2025, operating revenue was 106.668 billion yuan, down 9.8% year-over-year; net profit attributable to parent company was 38.339 billion yuan, down 3.5% year-over-year, with the decline narrowing quarter-over-quarter. Profitability pressure is primarily driven by: interest rate declines resulting in a net interest margin of 1.79%, contracting 14BP year-over-year; decline in non-interest income from bond investments and other sources. Single-quarter net interest margin improved 3BP sequentially, with liability cost improvements outpacing asset yield declines, stabilizing profitability at the margin. The company leverages digitalization for cost reduction, achieving a cost-to-income ratio of 27.47%, significantly outperforming industry averages, maintaining leading profitability efficiency.

II. Asset Quality
As of September end, the non-performing loan ratio was 1.05%, slightly declining 0.01 percentage point from year-end; loan loss coverage ratio stood at 229.60%, with sufficient risk provisions. Retail asset quality improved, with credit card and consumer loan non-performing rates declining; attention loans and overdue rates both declined sequentially, with decelerating risk generation and overall healthy asset quality.

III. Capital and Scale
Total assets of 5.77 trillion yuan, with steady scale. Core Tier 1 capital adequacy ratio of 9.52%, capital adequacy ratio of 13.48%, significantly exceeding regulatory requirements, with strong internal capital generation and no external financing pressure.

IV. Business Structure
Retail-focused with coordinated corporate banking initiatives; optimized retail loan non-performing rate, with wealth management and credit cards as main drivers of non-interest income. Affected by market conditions, non-interest income faces short-term declines, though remains a long-term growth avenue.

V. Core Assessment
Ping An Bank is in a stage of net interest margin bottoming, weak profitability pressure, and stable asset quality. Liability cost optimization, risk management, and digitalized cost reduction support fundamental recovery; industry interest rate declines and non-interest income volatility represent main constraints. Overall operational resilience is strong, positioned in a recovery cycle following transformation pains.

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