Core Viewpoint - Ping An Bank has successfully navigated through the most challenging period of its retail business reform, laying a solid foundation for future growth and development [1] Retail Reform Achievements - In the first half of the year, Ping An Bank has deepened its retail strategic transformation, enhancing loan, deposit, and wealth management services while solidifying its digital and comprehensive financial platforms for sustainable development [2] - As of June 30, the personal loan balance reached 1.73 trillion yuan, with mortgage loans accounting for 64.3% of personal loans; credit card customer acquisition increased year-on-year, and auto finance loans amounted to 295.62 billion yuan, a 0.6% increase from the end of the previous year [2] - The bank's personal deposit balance was 1.33 trillion yuan, a 3.1% increase from the end of the previous year, and wealth management fee income rose by 12.8% to 2.466 billion yuan [3] Measures to Strengthen Retail - Ping An Bank has effectively curbed the rise in retail loan non-performing rates, with a continuous decline in non-performing loan generation rates over six consecutive quarters [4] - The bank's retail loan scale has stabilized, with a significant improvement in asset quality; as of June 30, the retail non-performing loan rate was 1.27%, down 12 basis points from the end of the previous year [4] - The bank's retail strategy has become clearer, focusing on channel selection, customer management, and risk control to adapt to market changes [5] Future Development Path - Ping An Bank plans to accelerate the implementation of retail reform initiatives, enhance the capacity of its self-operated teams, and further optimize interest rates while improving its centralized and flat risk control system [6]

Core Viewpoint - Ping An Bank is shifting its retail strategy from high-risk, high-return products to medium-risk, medium-return products, resulting in a temporary decline in retail loan balances as the new products are being positioned [1][3][9]. Retail Business Strategy - The bank's retail asset balance has shown a slowdown in the rate of decline year-on-year and quarter-on-quarter, with a focus on optimizing the structure of its assets [3][5]. - The phrase "efficiency first, scale second" reflects the bank's approach to retail business amidst challenging macroeconomic conditions [3][4]. Loan Performance - As of June, retail financial assets accounted for 28.2%, down from 29.4% at the end of the previous year, with personal loan balances decreasing by 2.3% to approximately 17.26 trillion yuan [5][6]. - The bank's mortgage loans have seen a steady increase, with a growth of 20.1 billion yuan, while credit card receivables have decreased significantly [6][7]. Risk Management - The bank has actively reduced high-risk retail products, with "New Yi Loan" balances dropping from over 150 billion yuan to just over 10 billion yuan, and credit card balances decreasing from over 500 billion yuan to 390 billion yuan [9][10]. - The non-performing loan (NPL) ratio for personal loans improved to 1.27%, down from 1.39% at the end of the previous year, indicating effective risk management [10]. 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 advantage [11][12]. - Cost control measures have led to a 9% reduction in operating expenses, while the retail interest rate has decreased by 27 basis points, helping to alleviate pressure on the interest margin [12].

Core Viewpoint - Ping An Bank is shifting its retail strategy from high-risk, high-return products to medium-risk, medium-return products, leading to a temporary decline in retail loan balances as the new products are being positioned [1][3][4]. Group 1: Retail Strategy Adjustments - The retail asset balance of Ping An Bank has shown a slowdown in the decline of both year-on-year and quarter-on-quarter figures, indicating a structural optimization with high-risk products being cleared out [3][5]. - The bank's retail financial assets accounted for 28.2% as of June, down from 29.4% at the end of the previous year, with personal loan balances decreasing by 2.3% to approximately 17.26 trillion yuan [5][6]. - The bank's management emphasizes the need to adjust the asset structure to enhance profitability, focusing on core loans and medium-return loans [5][7]. Group 2: Performance Metrics - Key metrics indicate that credit card receivables account for over 95% of the decline in loan scale, while mortgage loans have increased by 20.1 billion yuan [6][8]. - The non-performing loan (NPL) ratio for personal loans decreased to 1.27%, reflecting a significant improvement in asset quality [10]. - The bank's retail non-performing generation has declined for six consecutive quarters, with a notable reduction in the second quarter [10]. Group 3: Risk Management and Asset Quality - The bank has actively reduced high-risk retail products, with "New Yi Loan" balances dropping from over 150 billion yuan to just over 10 billion yuan, and credit card balances decreasing from 500 billion yuan to 390 billion yuan [8][9]. - The bank is transitioning to a self-operated team for medium-risk products, aiming for a market scale of 200-300 billion yuan in the next few years [9]. - The bank's credit and other asset impairment losses have decreased, indicating a stabilization in retail operations [9]. Group 4: Interest Margin Management - Ping An Bank's net interest margin remains relatively stable at 1.8%, compared to the industry average of 1.56%, providing a competitive advantage [11][12]. - The bank has implemented cost control measures, reducing operating expenses by 9% and optimizing liability costs, which has helped mitigate the pressure on interest margins [11][12].

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]

Core Viewpoint - Ping An Bank reported strong financial performance for the first half of 2025, with significant growth in revenue and net profit, alongside a stable asset quality and a focus on optimizing its asset structure [1][2]. Financial Performance - In the first half of 2025, Ping An Bank achieved operating revenue of 69.385 billion yuan and net profit of 24.870 billion yuan [1]. - As of June 30, total assets reached 5,874.961 billion yuan, a year-on-year increase of 1.8%, while total liabilities grew by 1.7% to 5,364.899 billion yuan [1]. - The non-performing loan ratio stood at 1.05%, a decrease of 0.01 percentage points from the end of the previous year, with a provision coverage ratio of 238.48% [1]. Dividend Distribution - The bank announced a mid-year profit distribution plan, proposing a cash dividend of 2.36 yuan per 10 shares, totaling 4.580 billion yuan, which represents 18.42% of the net profit attributable to shareholders [1]. Asset Structure Optimization - Ping An Bank has been optimizing its asset structure by increasing financing support for key sectors such as advanced manufacturing, green finance, and rural revitalization [2]. - Corporate deposits reached 23,671.33 billion yuan, up 5.4% year-on-year, while corporate loans increased by 4.7% to 16,825.20 billion yuan [2]. - New loans issued in infrastructure, automotive, public utilities, and real estate sectors amounted to 239.777 billion yuan, reflecting a year-on-year growth of 19.6% [2]. Retail Business Development - The bank is advancing its retail strategy, enhancing loan, deposit, and wealth management services to ensure sustainable growth [2]. - New inclusive loans for small and micro enterprises surged by 33.6% year-on-year [2]. - The credit card new customer acquisition scale saw a year-on-year increase, while automotive finance loan balance reached 2,956.24 billion yuan, a 0.6% increase from the end of the previous year [2]. Wealth Management and Customer Engagement - Wealth management fee income rose to 2.466 billion yuan, a 12.8% increase, with personal insurance agency income growing by 46.1% to 666 million yuan [3]. - As of June 30, the number of registered users on the Ping An Pocket Bank App reached 177.5986 million, a 2% increase, with monthly active users at 38.745 million [3]. - The contribution of comprehensive finance to net new wealth customers accounted for 57.3%, with new customer acquisition at 50.8% [3].

Core Insights - Ping An Bank reported a decline in revenue and net profit for the first half of 2025, with operating income at 69.385 billion yuan, down 10% year-on-year, and net profit attributable to shareholders at 24.87 billion yuan, down 3.9% [1][2] - The bank continues to implement a mid-term dividend, distributing 2.36 yuan per 10 shares, totaling 4.58 billion yuan [1] Group 1: Financial Performance - The bank's basic earnings per share for the first half of 2025 was 1.18 yuan [1] - As of June 30, the personal loan balance was 1.725978 trillion yuan, a decrease of 2.3% from the end of the previous year, with mortgage loans making up 64.3% of personal loans [1] - The non-performing loan ratio for personal loans was 1.27%, a decrease of 0.12 percentage points from the end of the previous year [1] Group 2: Deposit and Wealth Management - Personal deposit balance reached 1.327338 trillion yuan, an increase of 3.1% from the end of the previous year [2] - The average daily balance of personal deposits was 1.317087 trillion yuan, up 5.6% year-on-year, with an average interest rate of 1.92%, down 37 basis points from the previous year [2] - Wealth management fee income for the first half was 2.466 billion yuan, a year-on-year increase of 12.8%, with personal insurance agency income growing by 46.1% to 666 million yuan [2] Group 3: Strategic Outlook - The bank indicated that some key performance indicators have shown positive trends in the first half of 2025 [2] - Plans for the second half include refining business strategies and enhancing professional capabilities to stabilize and improve overall performance [2]

Core Viewpoint - Ping An Bank reported a steady performance in the first half of 2025, focusing on digital transformation, risk management, and supporting the real economy while navigating challenges such as declining interest rates and loan restructuring [1][2]. Financial Performance - Revenue for the first half of 2025 was CNY 69.385 billion, a year-on-year decrease of 10.0%, primarily due to lower market interest rates and adjustments in loan business structure [2] - Net profit reached CNY 24.870 billion, down 3.9% year-on-year, with the decline narrowing compared to the first quarter [2] - Total assets amounted to CNY 5.874 trillion, a 1.8% increase from the end of the previous year [2] Deposit and Loan Growth - Total liabilities were CNY 5.365 trillion, up 1.7% from the end of the previous year, with total deposits reaching CNY 3.694 trillion, a 4.6% increase [3] - The average interest rate on interest-bearing liabilities was 1.79%, down 46 basis points year-on-year [3] - Corporate loans increased by 4.7% year-on-year, with a total loan balance of CNY 1.683 trillion [7] Risk Management - The non-performing loan ratio was 1.05%, a slight decrease from the end of the previous year, with a recovery of non-performing assets totaling CNY 18.556 billion, up 13.8% year-on-year [3] - The provision coverage ratio stood at 238.48%, indicating strong risk mitigation capabilities [3] Capital Adequacy and Dividends - Core Tier 1 capital adequacy ratio was 9.31%, with overall capital adequacy ratio at 13.26%, both showing slight increases from the previous year [3] - The bank announced a mid-term dividend of CNY 2.36 per share, totaling CNY 4.580 billion [3] Retail Business Strategy - The bank is committed to enhancing its retail strategy, focusing on optimizing loan structures and improving customer experience [4] - Personal loan balance was CNY 1.726 trillion, with a 2.3% decrease year-on-year, while personal deposits grew by 3.1% to CNY 1.327 trillion [5][6] Corporate Banking Focus - The corporate banking segment emphasizes precision in industry, customer, and product offerings, with significant support for advanced manufacturing, green finance, and technology sectors [7][8] - The number of corporate clients increased by 6.5% to 909,100, with strategic client loans growing by 15.8% [8] Sustainable Development Initiatives - The bank is actively promoting green finance, with green loan balances reaching CNY 251.746 billion, a 6.0% increase [10] - Support for rural revitalization included CNY 31.259 billion in funding, with a total of CNY 183.506 billion allocated to rural initiatives [11]

Core Viewpoint - Ping An Bank's 2025 mid-year performance report highlights a steady business operation, emphasizing the importance of digital transformation, risk management, and strategic reforms to enhance retail, corporate, and interbank business segments [1][2]. Retail Business - The bank maintains a strong retail strategy, focusing on optimizing loan structures and enhancing product offerings to improve customer experience and market competitiveness. As of June, personal loan balance was CNY 17,259.78 billion, down 2.3% from the end of last year, with a non-performing loan ratio of 1.27%, a decrease of 0.12 percentage points [3][4]. - Personal deposits reached CNY 13,273.38 billion, up 3.1% year-on-year, with average interest rates declining by 37 basis points to 1.92%. Wealth management fee income grew by 12.8% to CNY 24.66 billion [4][6]. Digital and Comprehensive Financial Platforms - The bank continues to enhance its digital and comprehensive financial platforms, with registered users of the Ping An Pocket Bank APP reaching 177.60 million, a 2.0% increase. The contribution of comprehensive finance to new wealth clients was 57.3% [5][6]. Corporate Business - Ping An Bank focuses on refining its corporate business by supporting key sectors such as advanced manufacturing and green finance. As of June, corporate deposits were CNY 23,671.33 billion, up 5.4%, while corporate loans increased by 4.7% to CNY 16,825.20 billion [7][8]. - The bank has established a tiered customer management system, resulting in a 6.5% increase in corporate clients to 909,100, with strategic client loans growing by 15.8% [8]. Interbank Business - The bank's interbank business adapts to market changes, enhancing investment trading capabilities and customer services. As of June, the number of value clients reached 1,328, with bond sales increasing by 79.0% to CNY 169.36 billion [9]. Sustainable Development and Social Responsibility - Ping An Bank actively promotes green finance, with green loan balances reaching CNY 251.75 billion, a 6.0% increase. The bank also supports rural revitalization, with CNY 312.59 billion allocated to related initiatives [11][12]. Financial Performance - For the first half of 2025, the bank reported operating income of CNY 693.85 billion, a 10.0% decline, while net profit was CNY 248.70 billion, down 3.9%. The capital adequacy ratios improved, with the core tier one capital ratio at 9.31% [6][12].

Financial Data and Key Metrics Changes - Capital generation reached $222 million, up 63% year over year [6][21] - C and I adjusted earnings were $1.45 per share, up 42% [6][21] - Total revenue grew 10% year over year [6][24] - Receivables grew 7% year over year, surpassing $25 billion for the first time [6][21] Business Line Data and Key Metrics Changes - Originations increased by 9%, driven by enhanced data analytics and product innovations [7][23] - Credit card receivables reached $752 million, up 61% year over year [12][21] - Auto finance receivables grew to over $2.6 billion, with quarterly originations up 29% [14][21] Market Data and Key Metrics Changes - 30 plus delinquency rate was 5.07%, down 29 basis points year over year [7][27] - C and I net charge offs were 7.6%, down 88 basis points year over year [29] - Consumer loan net charge offs were 7.2%, down 110 basis points year over year [29] Company Strategy and Development Direction - The company focuses on responsible credit access and disciplined credit management [5][17] - Strategic initiatives include enhancing product offerings and improving customer experience [11][12] - The company aims to grow its credit card business conservatively while maintaining a strong balance sheet [13][17] Management Comments on Operating Environment and Future Outlook - The macroeconomic environment remains stable, with a resilient non-prime consumer supported by a solid labor market [15][16] - Management expressed confidence in the business model and strategic initiatives, anticipating significant capital generation growth in 2025 [40][38] - The company expects a more normalized mid-single-digit growth in originations for the second half of the year [23][68] Other Important Information - The company raised $1.8 billion in the quarter through ABS and unsecured markets, enhancing liquidity [20][36] - Operating expenses were $415 million, up 11% year over year, aligned with receivables growth [33][34] - The company repurchased 460,000 shares at an average price below $46 per share [18][21] Q&A Session Summary Question: Can you discuss the competitive dynamics driving your origination growth? - Management noted a constructive competitive environment with strong origination growth despite a tight credit box, emphasizing their ability to maintain competitive pricing [44][46] Question: How do you plan to deploy stronger capital generation in the next 6-12 months? - The company prioritizes building a great business, paying dividends, and considering share repurchases or strategic investments based on capital generation [49][51] Question: What is the expected timing for the credit card portfolio to reach similar returns as personal loans? - Management indicated that while they are not providing specific guidance, they expect card yields to remain above 30% and are focused on perfecting the product before accelerating growth [55][59] Question: How is the macroeconomic environment affecting your consumer base? - Management stated that the non-prime consumer has remained stable, with improved net disposable income compared to previous periods [82][85] Question: Are there signs of increased price competition in the market? - Management acknowledged the presence of competition but emphasized their disciplined approach to maintaining credit quality and customer value [90][92]

Group 1 - The core difference between automotive finance and bank loans lies in the providers; automotive finance is typically offered by financial companies established by car manufacturers, aimed at promoting their vehicle sales, while bank loans are provided by various commercial banks with a broader business scope [1] - The loan application process differs significantly; automotive finance companies offer a more flexible and simplified application process, focusing on the consumer's actual need for purchasing a vehicle, whereas bank loans require a comprehensive assessment of the applicant's credit status and financial situation, leading to a more complex and lengthy approval process [2] - Interest rates and repayment methods are also key differences; automotive finance rates are influenced by the manufacturer's sales strategies and can vary widely, including promotional low or zero-interest loans, while bank loan rates are generally more stable and based on central bank policies, with fixed repayment methods [2] Group 2 - Loan terms for automotive finance are typically shorter, ranging from 1 to 3 years, reflecting the rapid turnover in the automotive industry, while bank loans offer more diverse terms, potentially extending up to 5 years or longer based on the consumer's financial situation [3] - The use of loan funds is restricted in automotive finance, which is designated solely for purchasing specific models from the brand, while bank loans can be used for various brands as long as the applicant meets the bank's requirements and regulations [3]