
Core Viewpoint - Ping An Bank is shifting its retail strategy from high-risk, high-return products to medium-risk, medium-return products, indicating a focus on stability and quality over sheer volume in its retail banking operations [1][2][3] Group 1: Retail Strategy Adjustments - The bank's retail loan balance has seen a temporary decline as it transitions to medium-risk products, with a notable reduction in high-risk product offerings [1][4] - As of mid-2023, the retail financial assets proportion decreased to 28.2% from 29.4% at the end of the previous year, with personal loan balances dropping by 2.3% [4][5] - The bank's management emphasizes the importance of optimizing the structure of retail loans, focusing on core loans and medium-yield loans to enhance profitability [4][6] Group 2: Performance Metrics - Key metrics indicate a stabilization in retail loan performance, with a significant reduction in the decline of retail loan balances in the second quarter compared to the first quarter [5][6] - The bank's mortgage loans have increased by 201 billion, with a notable improvement in asset quality, as evidenced by a drop in the non-performing loan (NPL) ratio from 0.47% to 0.28% [5][8] - The overall retail loan NPL ratio stood at 1.27%, showing a reduction of 5 basis points from the previous quarter and a decrease of 12 basis points from the end of the previous year [9][10] Group 3: Risk Management and Asset Quality - The bank has actively reduced high-risk retail products, with "New Yi Dai" balances dropping from over 150 billion to just over 10 billion, and credit card balances decreasing from over 500 billion to 390 billion [8][9] - The bank's strategy includes replacing intermediary channels with a self-operated team to enhance the quality of medium-risk, medium-return products, aiming for a monthly issuance of 50-60 billion in new loans [9] - The reduction in high-risk assets has led to a significant decrease in retail NPL generation, with a reduction of nearly 10 billion in the first half of the year compared to the previous year [9][10] Group 4: Interest Margin Management - The bank's net interest margin remains relatively stable at 1.8%, compared to the industry average of 1.56%, providing a competitive edge [11][12] - Cost control measures have been implemented, with operating expenses down by 9% year-on-year, and a reduction in provision for bad debts by 16% [12] - The bank aims to maintain a higher interest margin compared to peers, targeting a competitive position within the industry [12]