Ping An Bank to maintain moderate profitability: Moody’s

Its write-offs and derisking of asset mix will keep asset quality stable.

Ping An Bank is expected to maintain moderate profitability over the next 12-18 months, according to estimates by Moody’s Ratings.

“We expect the bank to maintain stable asset quality over the next 12-18 months because of large amounts of write-offs and de-risking of asset mix,” the ratings agency said in a June 2025 report. As a result, the bank’s retail nonperforming loan (NPL) ratio decreased to 1.32% from 1.39% in end-2024.

The Shenzhen-headquartered bank reported an NPL ratio of 1.06% as of 31 March 2025, unchanged from the year-end levels for 2024 and 2023.

Although declining, the bank's provision coverage ratio remains solid at 236.5% as of the same period, Moody’s said.

“We assess that PAB can manage the risk from its exposures to the real estate sector and retail loan portfolio,” it said, noting the NPL ratio for corporate loans to the real estate sector was just 2.25%, moderate compared to other joint stock banks/

The bank should also maintain its stable capital position through 2026 on its slow asset growth. CET 1 ratio rose to 9.41%, whilst gross loans declined by 1% in 2024.

However, profitability will face pressure due to the decline of its net interest margin (NIM). Annualized return on average assets (ROAA) also fell to 0.78% in 2024, from 0.85% in 2023, on declines in the bank’s net interest income and fee income.

“We believe PAB will maintain adequate funding and liquid resources over the next 12-18 months, with its liquid banking assets exceeding its use of market funds,” Moody’s said.