Ping An Bank's Income Topped USD14.5 Billion Last Year Amid Slowing Profit Growth
Yicai Global
/SOURCE : Yicai
Ping An Bank's Income Topped USD14.5 Billion Last Year Amid Slowing Profit Growth

(Yicai Global) March 17 -- Ping An Bank Co.'s [SHE:000001] efforts have paid off with operating income rising above CNY100 billion (USD14.5 billion) last year, though net profit growth dipped slightly on a substantial increase in provisions for asset impairment.

The bank's annual report, released yesterday, shows its operating income hit CNY107.7 billion, climbing 12 percent from a year earlier with 11 percent increases in interest and intermediary business income. Net profit grew nearly 3.4 percent on the year to CNY22.6 billion.

In stark contrast to the steep rise in income came a significant decline in the bank's net profit growth, down at 3.36 percent and below the industry average. The fall came as a result of a CNY45 billion spend on provisions for assets impairment.

The lender's income structure improved amid a rapid rise in revenue. In 2016, net profit from interest reached CNY76.4 billion, making up 71 percent of the total, the remaining revenue, from non-interest income, came in at CNY33 billion.

Between 2012 and 2015, Ping An posted net profit growth far higher than the industry average, but growth slowed throughout last year from 6.1 percent on the year in the first quarter, to 5.52 in the third, and then 3.36 over the year. The figure is considerably lower than other Chinese joint-stock commercial banks, net profit growth at China Merchants Bank was 7.6 percent and Shanghai Pudong Development Bank's profits grew almost 5 percent.

Last year, Ping An put aside CNY45.4 billion in asset impairment provisions, 52 percent more than the year before. It accounts for almost 60 percent of the profits before the provisions were made. As of the end of last year, the bank's total provision was CNY40 billion, up 36 percent from the start of the year, while the loan loss provision coverage ratio rose 0.3 point to 2.71 percent.

Follow Yicai Global on Facebook @yicaiglobal and Twitter @yicaichina.

Follow Yicai Global on