Dear investors, analysts, and friends from the media, good afternoon. Welcome to Ping An Bank's 2025 annual results announcement. I'm Zhou Qiang, Board Secretary of the bank. First of all, I would like to express my sincere gratitude to all of you for making a special trip to attend today's presentation. For those who are unable to join us in person, we have arranged teleconference and live streaming, including Ping An Pocket Bank and TrendJi Network with simultaneous interpretation available for overseas investors so that you can all follow the latest developments of our bank. As we leave 2025 behind and step into 2026, we are witnessing profound changes in both the internal and external environment. China is embarking on the new journey.
2026 marks the opening year of the 15th five-year plan period, with every sector channeling the energy of a fresh start to build strong momentum going forward. Continued macroeconomic policy support and the warming macroeconomic environment are providing the banking sector with a better environment of steady progress. The banking industry is entering a new cycle for extended periods. Banks have been characterized as pro-cyclical, high dividend yield investment. However, amid interplay and competition between technology and high dividend themes, the market is placing increasingly higher demands on banks, prompting every bank to reassess their own strategic positioning. Only those banks that can demonstrate their own alpha with distinctive characteristics and core capabilities will stand out. Ping An Bank too is entering a new phase over the past two years.
We are among the first to initiate reform and transformation, directing our efforts and build our internal capabilities to meet external challenges. Moving early, we expect to emerge early. This year is therefore a very important year in which our reform efforts are bearing real fruit. Our operating performance in 2026, we think our long-term value is well worth the wait. Now, please allow me to introduce the senior management. They are Mr. Ji Guangheng, Secretary of the Party Committee and President, Mr. Xiang Youzhi, Vice President and Chief Financial Officer, Mr. Fang Weihao, Vice President, Mr. Wu Leiming, President Assistant, Chief Risk Officer and Chief Compliance Officer, and Mr. Wang Jun, President Assistant. Also in attendance are the heads of the bank's major business departments at the head office. I now invite Mr. Ji Guangheng, Secretary and President, to deliver his opening remarks. Please, President Ji.
Dear investors, analysts, and the friends from the media, good afternoon. Welcome to Ping An Bank's 2025 annual results announcement. It is a great pleasure to meet with you all once again. 2025 was a year of extraordinary significance. The 14th five-year plan was brought to a successful close. The 15th five-year plan was mapped out. China's modernization advanced with firm and steady strides. At the same time, the external environment remained complex and challenging. Domestic development faced numerous headwinds. At a macro level, deep-seated structural imbalances in the domestic economy continued to surface with insufficient growth momentum in both consumption and investment, while risks in key sectors remained in need of ongoing prevention and resolution. In the face of these challenges, China's economy forged ahead under pressure, demonstrating remarkable resilience.
Overall economic performance remained stable with positive progress as development continued to advance toward higher quality and greater innovation, manifesting the economy's tremendous vitality. At industry level, the banking sector has entered a development environment characterized by low interest rates, compressed NIM and reduced yields, with institutions broadly confronting challenges such as insufficient effective credit demand, mounting pressure on risk prevention and control, and narrowing profitability margins. Nevertheless, buoyed by coordinated macroeconomic policy stimulus, the steady advance of new quality productive forces, continued expansion of domestic demand, and an improving mix of economic growth drivers, the banking sector as a whole has maintained sound and stable operations. In recent years, banks have also been proactively seizing opportunities and driving for reform and innovation so as to better adapt to the new landscape of economic development and strengthen their ability to navigate through economic cycles.
Today, we'll focus on three key areas. First, Ping An Bank's 2025 financial performance. Second, progress on our strategic reform agenda. First of all, 2025, it was an exceptionally challenging year for Ping An Bank, yet it was also a year in which we laid a more solid foundation for our future. Impacted by low prevailing market interest rates, our continued commitment to passing benefits on to the real economy and our proactive business structure adjustment, our revenues and profits declined year-on-year. For the full year, we achieved RMB 131 billion revenues, down by 10.4%, and net profit RMB 42 billion, down by 4.2%. However, as our strategic reform continues to deepen, a number of operating metrics are beginning to show improving trends, as I will discuss shortly.
In 2026, we'll devote our full efforts to achieve our operating objective of return to growth. In 2025, we also have a number of bright spots in our operations. First, our asset structure was adjusted and optimized. Mid-yield retail credit products gradually ramped up in volume. Corporate general loans maintained strong growth, and our support for the real economy was further strengthened. Total assets grew 2.7% from the prior year. Corporate loan balances grew 3.5% year to date, and loans to technology enterprises and in the green finance sector achieved solid growth. Second, we continue to elevate our granular management capabilities. By proactively optimizing our funding costs, the general deposit cost was brought down to 1.65, a decline of 42 basis points, the largest reduction among major joint stock banks based on disclosed data.
The full year NIM stood at 1.78%, which has essentially stabilized. Third, asset quality continued to improve and our risk buffer capacity remains sound. NPL ratio stood at 1.05, down by one basis point from the prior year. NPL formation ratio declined by 0.17 percentage points year-on-year, with a particularly notable reduction in retail NPL formation. Provision coverage ratio stood at 221%, maintained within a healthy range. Fourth, capital management became more granular. By adhering to a balanced approach of organic capital growth and external capital replenishment, we further consolidated our foundation for sustainable development. CET1 stood at 9.36, maintained at a reasonable level. Detailed operating data will be presented by Vice President and CFO, Mr. Xiang Youzhi shortly. Secondly, I want to talk about the progress on strategic reform.
In 2025, Ping An Bank upheld the principle of party building as the guiding force for business development and actively implemented the spirit of the 20th National Congress of the CPC and the subsequent plenary sessions, as well as the Central Financial Work Conference and the Central Economic Work Conference. We remained committed to the political nature and people-centered orientation of financial work, made solid progress in the five major articles. At the bank-wide internal work conference at the beginning of this year, we put forward the view that the bank must maintain strategic conviction. We cannot reinvent ourselves every year with new ideas, but must instead proceed steadfastly step by step, consolidating our foundations. Throughout this process, we must regularly reflect on what we have done right and where we still need to improve.
In terms of strategic execution over the past two and a half years, Ping An Bank has accurately assessed the direction of the macroeconomy and made timely adjustment to our strategic approach. Building on our core strategy, we focused on financial performance and internal management, achieved a break and rebuild transformation in our retail, enabled corporate and interbank to actively fill the gap and continuously deepen the synergies between the head office and branches, as well as between banking and insurance. In another regard, we proactively reduced high-risk assets, cleared legacy exposures and brought NPL formation to a peak. On the liability side, we proactively optimized our funding structure. On the asset side, we encouraged high-quality credit deployment.
Head office business enablement of branches was further strengthened throughout robust supporting areas such as pilot programs, resource incentives and approval policies so that local branches, they are more proactive in doing their business. At the same time, we firmly upheld the principle of strict bank governance, deeply embedded a culture of compliance, rigorously practiced the philosophy of reducing cost, improving efficiency and elevating quality over volume, and reinforced talent pipeline development, accelerated technology and innovation-driven initiatives. Turning to specific business and management areas. First, the bottoming out of our retail is essentially complete with the first signs of dawn emerging. The most difficult period according to a patient who has just recovered and is still too weak to bear intensive nourishment has passed.
We now have seen some strengths in our all kinds of retail business like credit cards and also like Orange e-loans, Orange Business loans, and maintained our commitment to high-quality AUM growth. Second part, our corporate business achieved a synergy with sound optimization, providing strong support to the bank's overall profit performance. We deepened our strategy of being industry-specific, customer-oriented and product-driven. Refined our industry risk and customer management mechanisms, and fully leveraged our core strengths in supply chain finance, cash management and cross-border services, and accelerated breakthroughs in key subsectors. At the same time, our financial markets and interbank business nimbly adjusted trading strategies, flexibly allocated and deployed funds across accounts, unlocked synergy benefits and enhanced comprehensive customer management and profit.
Profitability. Third, as the quality management significantly strengthened and control remained effective, we advanced the restructuring of our risk management, enhanced the independence of risk management functions, essentially cleared the legacy high-risk assets, and so that we intensified NPL for collection and disposal, achieved a significant reduction in credit cost, and continuously upgraded our bank-insurance synergy. Fourth, we comprehensively strengthened granular management to improve quality and efficiency. We continuously optimized operating cost by supporting investment in strategic key business and elevated the cost benefit of business and reached ROI consciousness across head office and branches, optimized branch network layout, and reinforced talent pipeline development. We place the right talent in roles where they can best contribute and enhance their professional capabilities and overall management standards of our teams.
We also further furnished our reputation as a technology-driven bank, enrich retail customer marketing tools, build a corporate digital product matrix, comprehensively upgrading investment advisory, risk control, and service capability, and driving business transformation through technological innovation. Although 2025 was a really difficult year for Ping An Bank, a review of our operating performance in the second half, and particularly in the Q4 , reveals that effects of our reform are beginning to materialize across multiple dimensions. Retail loan balances stopped declining in the second half. Credit card balances gradually stabilized. Mortgage and auto finance balances registered positive growth from the prior year. Orange e-Loan and Orange Business Loan balances broke through CNY 30 billion mark. Retail asset quality improved markedly. Wealth management fee income with bank insurance as key contributor continued its contribution. Corporate general loans grew to 9.2%, approaching double-digit growth.
Forfeiting volumes were reduced by more than RMB 130 billion throughout the year, with asset structure continuing to improve. Full year NIM was 1.78% and laying a solid foundation for our objective in 2026, that is return to growth. Based on key metric performance in the first two months of 2026, our major operating data already showing positive trends. Thirdly, we'd like to talk about the priority measures for next phase. In 2026, Ping An Bank will uphold the centralized and unified leadership of the Party Central Committee over financial work, deeply practice the philosophy of finance for people, fully implement all regulatory requirements, anchor our efforts for the objective of focus on operation, implementing strategy and return to growth.
First of all, we're going to continue to uphold Party building to add the guiding force and consolidate the foundation for development. We will leverage high-quality Party building to drive high-quality development centered on making solid progress on five major articles. We will also enrich our product offering, differentiate the resource support, improve our capacity to serve financial needs in scientific and technological innovation, green and low-carbon consumption, as well as inclusive finance for SMEs. We will closely follow national strategy, refine our business structure transformation and upgrade, persistently resist unhealthy internal competition, fulfill our primary responsibility in protecting rights and interests of the financial consumer, and work collectively to uphold a sound and orderly competitive environment in financial sector. Secondly, focus on operational management and deepen the implementation of the reform. We will remain unwavering in our strategy of strengthening retail, refining corporate that specializes in interbanking.
In retail, we will deepen the development of our positioning as a media credit bank, strong bank insurance wealth bank and low-cost digital bank. On asset side, we optimize our product system and drive volume growth and media product. On liability, we reach high-quality product supply, continue to improve CASA ratio, reduce funding cost. We tap into potential of the consumer expansion and be a part of the Ping An Group's strategy of integrated finance, plus healthcare and elderly care, leveraging the Group's resources to deepen personal customer management.
In corporate banking, we will deepen bank business reform implementation, accelerate the credit deployment to emerging industry, supporting sectors with strong transformation potential, advance effective execution and management of SMEs, focusing on industrial specific scenario to develop specific customer plus specific product combination solution, consolidate our product strength throughout the process, leveraging Ping An Group's resources to build a distinctive yet integrated financial service, improve our comprehensive support. While regarding interbank, we'll continue to consolidate our trading capacity, building an intelligent trading and risk management hub, improve transaction decision-making efficiency, diversify income source, deepen the development of the multi-asset investment capacity, strengthen our long-term investment and asset allocation capacities.
Secondly, we will also seize the opportunity presented by the new technological development and upgrade to our technology-driven capabilities. We will strengthen the application of artificial intelligence, increase resources environmental investment, making substantial progress in high quality digital finance development, focusing on key levels including digital employee, precision marketing and precision risk control. We will also help to empower the operation management, minimize losses, improve efficiency and increase revenue. We will strengthen the development of the technology and data infrastructure, deepen master data management and the application of the external data, and evolve from a human machine collaboration towards intelligent decision-making and automatic execution. Through the rapid deployment of agent AI platform, we can enable idea incubation and value conversion, supporting efficient operation across a bank. Thirdly, we will continue to deepen our operational and management work across all dimensions.
Key priorities would include treasury management framework, refine our organizational and workforce development, consolidating risk management, advancing the capacity of the whole bank. We will improve corporate governance practice, reinforce our consumer protection and security safeguards, and continue to attach great importance to compliance management, persistently consolidate the development foundation for the entire bank. Thirdly, we will work at full force to improve the performance and drive and return to growth. As I mentioned, after 2.5 years of the strategic transformation, the most challenging period is already gone. Going forward, Ping An Bank will hold firm in its confidence, withstand the transitional pain and achieve continued value expansion and a stable recovery in retail. We will pursue active customer expansion with stable pricing and revenue growth in corporate banking.
We will further consolidate the key areas for credit deployment, stabilize the deposit scale and continue to work towards return to growth, deliver a wonderful scorecard that satisfy the market. While at the same time, Ping An Bank has always uphold the shareholder interest. This year, we plan to maintain a reasonable dividend payout ratio and strive to achieve an improvement compared with last year, creating greater value to our investors. Thank you.
Thank you, President Ji. At the bank-wide work conference held at the beginning of this year, President Ji led us in reviewing and reflecting what has been done right and what has still need to be improved. We need to continue to improve our work and continue to do the right work.
The entire bank has exerted its efforts to operating objectives, focusing on operations, implementing synergy and return to growth, working in full dedication to improve the steady recovery of the service and the financial performance. You can see that, starting from the beginning of this year all the financial data has been improving and we are actually making every growth with greater strengths and a sustainable improvement. Ladies and gentlemen, you can see that, all the work's been well on the track, and we're gonna report to you when the time comes. Coming next, let's welcome Mr. Xiang Youzhi, VP and CFO of Ping An Bank, to walk you through the 2025 annual report and present to you our full year operating results. Thank you.
Dear investors, all the analysts and friends from the media, good afternoon.
Coming next, please allow me to report to you the 2025 operational performance of Ping An Bank. First of all, let's take a look at the overall performance. In 2025, the total scale of assets remained in steady growth. With the structural optimization, the assets YTD grew by 2.7%, where we optimized the liabilities and also making sure that total assets increased by 2.7%. At the same time, you can also see that the deposits grew by 1.4%, especially the current account increased by 0.6%. Secondly, the bank continued to work for the five major sectors to support the real economy and the rural revitalization.
In 2025, on technology finance, inclusive finance, green finance and pension finance, we made some very steady growth, especially while supporting the rural revitalization. Thirdly, with the ever-decreasing NIM, as well as a proactive adjustment of the business structure, along with the liability industrial landscape, the full year revenue has been down by 10.4%. Even with such a pressure, we'll still be able to continue to advance efficiency gain and the cost reduction. Operating expenses being down by 5.9% and our cost revenue ratio still maintain at a good level. NPL ratio's been reducing and while at the same time, the total provisions being down by CNY 8.8 billion. Ultimately, the net profit was CNY 42.6 billion, down by CNY 4.2 billion, down by 4.2%.
Fourthly, as you can see that the NPL formation improved. In 2025, the NIM was 1.78%, down by nine pips. On year-over-year basis from the trend, the de-reduction was narrowly done. It's because we continue to optimize the liability structures, continue to work on the low-cost deposit. Overall speaking, the interest of our liability is being further improved by down 47 basis points, reaching 1.67%. We're taking a look at the NPL formation rate. It's been continually improved with asset quality remain stable. NPL ratio was 1.05%. NPL formation ratio was 1.63%, down by 0.17%. Still maintain a very healthy level. The provision coverage ratio was 220.9%.
We have capital management with improved CAR. Especially the core Tier 1 CAR was 9.36%, up by 0.24 basis points. Tier 1 CAR and CAR are all been maintaining very good growth. Next, let me dive into the retail business. For the retail business in 2025, deposit has been maintaining a very healthy growth, where the mortgage also have been stabilized. By the end of 2025, the retail loans being stabilized by reducing 2.3% compared with the beginning of this year. The reason is because you can see that the credit card loans being down by 6.8% and operating loans being down by 5.2%, and the mortgage are improving.
At the same time, we also continue to improve the high quality loans and optimize the loan structures. The underlying asset structure is being further optimized. Same as retail, deposit remains stable, and you can see our interest rate is actually improving progressive track record. Well, regarding the retail business, AUM has been maintaining a growth. The wealth management fee income up by 50.8%. It is worth noticing we have the bank insurance income grow by 53.3%. At the same time, retail business continue to go for digitalization and integrated finance platform construction. For digital platform, for acquire customer extend safely, optimizing operation and extension platform capacities, we are now making new strides.
For integrated finance platform, no matter for the new increased wealth customer, new increased AUM or new increased credit card customer, are still making great contribution to improve the overall performance. Let's also take a look at the corporate business. In 2025, we have optimized Orange Loan and a significant improvement for deposit cost ratio with ever-improving structure, especially the loan. It's been growing by 9.2%. That's for the corporate loan. Well, we also optimized the loan structure and continue to reduce bills and other low interest product. The deposit finance is still continuing nice growth. At the same time, you can see last year we have made a 46 BPS optimization on the demand deposit cost rate, where for the whole corporate business, we still work on industry-specific, customer-specific and product-driven approach.
Last year, our corporate customer number increased by 30.2% compared with beginning of the year. Other financial indicators are all maintain healthy growth. For interbanking, we still work on the investment transactions and the consumer business and continue to ramp up the business growth, especially on trading service and the sales and trading, and both are showcasing very nice growth. The fourth one would be the asset quality. Last year, due to the impact from the property market, the corporate NPL ratio improved slightly. However, the corporate NPL ratio still remain at a low level. You can see that the controlled NPL ratio has been controlled, but at the same time, the bank has continued to do the write-off and the collection effort has been further stepped up.
You can see that for the full year, the non-performing assets being covered has reached CNY 36.8 billion, up by 10%. Where at the same time, the write-off also reduced to CNY 48 billion, down by 23.8%. For sure, we're going to keep an eye on the risk management of the property market as a whole. You can see that within the whole bank, the mortgage business or real estate related business, the financing of the real estate loans decreased by CNY 35 billion. The NPL ratio being up by a few pips is because the sales cycle of the property market is being further extended and the capital started to face shortage, but overall risk is very controllable.
At the same time, for non-credit risk involving property-related business, the financing scale of the trust and funds was CNY 31.8 billion, down by CNY 0.9 billion compared with the beginning of this year. That's all for the 2025 financials. Looking to the 2026, it's the first year of the 15th Five-Year Plan. The economy, both home and abroad, is being quite complex. We do have opportunities and challenges at the same time. We're in the face of the new challenge. We will take our strategic commitment, leveraging high-quality development as a key. Those are the seven points we're going to continue to advance our business on the slide in order to further improve the quality. First of all, we'd like to work on the five major articles and continue to improve the efficiency of the financial service.
Secondly, shift the risk management forward and implement precise policies to support high quality improvement while firmly maintain the risk compliance baseline. Thirdly, optimizing asset liability management to empower business operations. Regarding retail business, we need to build on the customer-centric specialty retail bank, achieving goal with priorities benefiting and considering the scale. Then for corporate business, we will work on the five key priorities in finance. While for interbank, we need to continue to strengthen investment transactions and deepen interbank cooperation. Also deepen digital finance. That's all for me. Thank you.
Thank you, President Xiang. He has provided an in-depth analysis of the key metrics in the annual report, unpacked operating logic behind the numbers, and proactively addressed a number of topics of market concern. We have seen many proactive changes over the past year, so we suggest you to focus on the trend. All these topics Mr. Xiang mentioned, I think, laid a solid foundation for our discussion later. Later we'll now move into the interactive Q&A session. I would like to invite our management team. As of now, I think there are over 80,000 guests and investors have joined our presentation through in-person attendance and the various online channels. We sincerely appreciate your interest and support. Many of our guests have made a special trip to attend today's event, and we believe their questions are highly representative.
Today's Q&A session will therefore focus primarily on interaction with guests present in the room. We'll first invite analysts followed by friends from the media. In order to capture the full breadth of your views and suggestions, we kindly ask each guest to raise only one question per turn. Please state your name and organization before asking your question. Okay, who wishes to ask a question, please raise your hand. Okay, the first question, let's go to May Yan from UBS.
Thank you, Mr. Zhou, give me the first opportunity to ask the question. I'm May Yan from UBS, and also Ping An Bank has always been the first listed bank to hold its annual results conference so that we can have a really good opportunity to talk with the management. My first question will be more strategic, and it goes to President Ji.
In the past two years, I know that Ping An Bank have made a great reform. In your view, which phase do you think we have already entered into, 70% or 90%? As of now, what's the main results you have seen? The next phase, what are the key areas that you would like to focus more? What's your outlook for 2026? That's my question. Thank you.
Regarding your question, I think I have many addressed in my delivery speech. This is the third year for the new management team after the past two and a half years. Indeed, I think this progress or process, there are very challenging external environments and the reform as of now. Now we're entering the deep water.
Regarding how much you ask me achieved? I think over 70%, and it's ongoing progress, and we need doubling our efforts. Of course, we hope that during this process we can digest some legacy issues and form new momentum for the future. At the same time, guided by the government guideline and also based on our own business characteristics to form our own trend and momentum. In my speech, I touched upon that. In January, the bank-wide conference, we spent two months to review what we have achieved in the past two and a half years, what we have done right, and what we need to hold on, and what need more efforts to be put up.
During this process, we are reviewing back and forth and talk with the all those new and former management team members. During this process, we have found some questions. The results, added with the first two months' performance we have seen in this year, within the year 2026, our goal, we said we need to return to growth. This is a really broad and strategic goal for Ping An Bank. With this opportunity, we'd like to give the market that, the confidence that we are back to the market in 2026. This transformation since 2023, we are holding our aim and strengthening on the Party guidance business line that we are reducing high-risk assets.
Of course, it was high yield at that time, but we made our mind that we need to digest them and to optimize asset allocation and to adopt a granular capital management. We're cutting the cost and to govern the bank in the most strict manner and to strengthen our frank conversation or discussion with the regulators and the market. Based on what we achieved in 2025, though revenues and profits are all negative growth, but for efficiency-related metrics, they are improving. For deposit costs, well, we are among the very first banks to mention this metric. We were down by 42 basis points year-on-year. NIM, the decrease speed narrowed year-on-year.
Among joint stock banks, I believe our NIM and deposit cost, and also our provision coverage ratio, including NPL and NPL formation ratio, I think are among quite a good range. I said, I think our performance is quite stabilized. In other regard, asset structure stabilized as well. For the medium yield retail products, they're gaining volumes and corporate general loans grew by 9.2%. Also, discounting and forfeiting volume over the past two years was down by CNY 113 billion and the risk performance greatly improved. Formation ratio was down by 17 basis points year-over-year. I think all things are going towards a positive trend, and we have seen initial results for the retail transformation. We already see the emerging light, the dawn light for our transformation.
That's why in 2026, we are quite confident that we can return to growth in 2026. Looking back, we have calculated several points, but I will not elaborate here. The main strategic measures I would like to mention is first party guided to govern the bank in 2025. We have actively conveyed some party-related lessons and activities so that we can have really strong focus on ideological development. Every Monday in the afternoon, we will have a party member conference for the whole bank. Because we are holding the annual results announcement today, so yeah, this week we'll delay that.
We're talking about during this process, this transformation, how can we better employ the requirements from the party, from the government and to put all those ideas into our business performance and operation. Second, in consumer rights protection. This morning we spent hours discussing how can we better protect customers and consumers' rights. Because through this process, we can better reflect our like awareness in protecting consumers' rights. Three years ago, we said we are strictly manage the bank to strengthen party members' awareness in doing business in the right way. Second, we are strengthening our research and analysis of the macro environment and to discern the right direction for banking business. Third, with the impact of narrowed NIM, we are among the first to react. I remember several years we've discussed with the market.
I think, standing at this time point, I'm quite confident to say we are still on the right track. Though we have seen a great reduction in the retail high-yield structured assets, and also we have put great focus in cultivating our own team, and we're strengthening corporate and retail synergy. All those have laid really good foundation and conditions for future growth. The last one I want to talk about is that we strengthen our talk with the regulators, and we are keeping a frank conversation with the market so that we can adhere to the five major articles. The frequency and the levels we talk with the regulators, and results we see have been quite good.
We've been talking with the regulators and also at all levels in central, provincial or city level, so that they can rest assured that they know what we are doing, and they know well which process we are, and we can understand better their requirements and their support to us. We also upgrade the investor relations to strengthen our market profile. We always said we need to be candid and to be really frank with our investors. With like annual results conference, presentations, investor visits and roadshows. Sorry. I got a phone call, sorry. All channels, so that we can provide timely, straightforward communication on our performance and build a stronger investor confidence and market credibility. Especially during the difficult times, we need to be very frank with our investors about our fundamental performance, and they can know which process we are.
Fifth, I would like to touch upon is that we are deepening our transformation across all business line. Mr. Xiang just delivered a really detailed report. I will not elaborate it here. Sixth point I would like to touch upon is that we upheld strict governance and granular management throughout the company organization. We place strong emphasis on building a compliance culture and institutional framework, tightening oversight of management staff at all levels. Internally, we aligned thinking and build bank-wide consensus around the One Ping An Bank. We answer or respond promptly to employee concerns. On cost, we applied rigorous management to funding cost, operating cost, and risk cost. Head Office, for instance, has continuously optimized the branch network.
Over the past several years, we have seen a really great changes that we have been really mindful in how to save every dollar, and we have sharpened our ROI mindset. At all respects, we have seen great improvements. At the same time, talent pipeline development has been a continuous priority through structured rotations and career adjustments. A combination of internal promotion and external hiring and a significant ramp-up in graduates recruitment all are aiming at building a management team that can sustain the bank's long-term growth. We're looking to the year of 2026, what we're going to do. In my prepared remarks, I have already shared with you. Overall speaking, for next step, what we need to do is to actually build our blueprint to the end. We stick on what we do right, but still, there are something we need to improve.
For example, after the internal meeting, we believe the retail business is being further stabilized. However, the retail business need to go back to the healthy and efficient growth. I think it still takes time, 'cause overly speaking, the retail and the credit business was still undergone great pressure, as you can see from the consumption statistics. Especially, right after the Spring Festival to today, and you can see that, probably we have the lowest negative growth for the, individual loans, probably the lowest one among all the banks. But still, the banks takes time to repel and restore the business, same as the market. That is what we have now.
In the whole process for the past few years, we were working on digesting the high-risk assets in retail business, and we also withdrew from some high-risk customers and continued to further reduce the.
Retail loan size. You can see that last year, according to the revenue, and it's been down by around 10%. However, by the beginning of last year, we still have some high yield and high risk retail assets. For those high yield and high risk assets, I believe the adjustment has already been made in place. Still, the retail business, we are under pressure for reform. This is something I have to present. Secondly, we still need to further strengthen our corporate business system building. We used to be pretty weak for the corporate business. For the past few years, the business been revitalized with nice growth. However, you may notice, many of the banks are emphasizing on corporate business for the past few years, especially in the industrial circle.
How can a bank would be able to maintain such a good momentum of the corporate business? It's a key. Especially we really would like to make sure we have the customer specific product. Without initiating the unhealthy competition, we still would like to maintain a good corporate business growth. But at the same time, the risk control over corporate business is also the key. When people's been keeping an eye on the property market, we should also notice how it may impact the corporate business as a whole. Still more adjustments be needed. The third improvement we need to do is the overall risk control management. I believe now we have the top six branches accounted for 60% of our overall revenue. We do have six branch that are working with very good performance.
We still have some mid-range branches whose potential still need to be further tapped in, but that really takes time. In key areas, in key verticals, we really need to make sure those branches can continue to improve their performance to withstand the market need. That is also the so-called unbalanced development issue we need to address. Well, fourthly, I believe technological investment is quite important. Ping An Bank and Ping An Group made a sufficient investment into technological innovation. However, for the past few years, even if we made the technical investment, however, as AI and big data is coming, we still need to maintain our leadership for technical development. Talents pipeline is also the key. We need to make sure we have enough talents in the pipeline ready for the business to go forward.
I believe what has been presented to you are the key of the market. The reform has been done for a few many years, and we were doing the reform for around two years and a half . The basic reform has already achieved an initial result. I think the most difficult time is already gone. The performance being stabilized, especially for the past two to three years. I think the performance being, basically speaking, stabilized. For the past few years, the bottom building is already gone. The most challenging time is also gone.
I do hope in the near future, starting from 2026, no matter top down or bottom up, let's continue to return with growth, working with the party building as our leadership, continue to make sure the financial work works for people, and also providing financial support for the good start of the 15th five-year plan. In this process, we should also continue to speed up the credit release and also improve the deposit size and well manage the risks. In the whole process, we hope that the result from our reform could be stabilized and could be carried forward. Well, for sure. We also would like to hear more from our investors, from the friends from the media and analysts for your insights and for your suggestions and your support. Thank you very much for being patient with Ping An Bank for the past few years.
Thank you. Thanks for President Ji. As you mentioned, for the past two years, we are doing something right, and the reform result is aligned with our expectation. We are now seeing the dawn at the end of the tunnel, where for this year, we're going to continue to stabilize the business for further growth. Let's welcome another analyst. Please. Thank you.
Thanks. My name is Zhang Shuai, coming from CICC. Thank you very much. Thanks for President Ji and Mr. Zhou. I heard the word "return to growth," the key words for several times. I was taking a look at your financial report. The revenue's been under pressure, but the leadership has already mentioned you are gonna to embrace growth.
After two to three years of reform, I was feeling quite happy to hear "return to growth." However, from the volume, from the price, and from the non-interest income, how you're going to really return to growth? Any specific measures and target? Thank you.
Thank you very much. Let me help to answer the questions. Well, for Ping An Bank, I have to say for the past two years and more, we've been proactively reorganizing ourselves. For the past two to three years, you can see the adjustment and the reform has already been well done, especially the high-risk asset and the high-risk retail business. So overall speaking, in 2026, the asset side of the retail business, we believe will be able to catch up with the overall market headwinds.
The second point, for the past two years and more, our liabilities and asset structure were also made further adjustment, especially you can see our interest-bearing pay cost has been continued to go down, like, from last year. Also have a one-time adjustment for this year, and which is benefiting NIM and revenue as a whole. At the same time, for the past two years, and for the corporate business, the area is also continue to build a great momentum. Last year, our corporate customer number was growing by 3.2%, which will also help to provide us a solid foundation for business growth. One more point. Last year, you can see within our revenue, a significant reduction is being impacted by the bond market. Last year as a full year, the bond market showed some volatility and fluctuations.
The absolute return from the bond is still good, outperforming the market. However, 2024 was a year, a big year for bond market. That's the reason in 2025, comparatively speaking, there was a negative growth. We are summarizing the lessons and adjusting our strategy, hoping in 2026, even if there are some fluctuations and volatilities of the bond market, we hope that we can well study the market to flatten out the volatilities and then to continue to boost the revenue as a whole. Well, let's also take a look at the risk. You can see for the NPL formation ratio, even if we do see some property investment from the property investment impact to the retail business, but the overall risk is still well controlled.
You can see the high-risk asset reduction are going to have alleviated the pressure on the risk. In 2026, you will see how the high-risk business reduction going to benefit our risk as a whole. To some extent, it's also going to boost the recovery of the profit. Well, regarding the cost, and you know that we were initiating the cost initiative for the past two years. In 2026, we're going to continue to do the same. The cost reduction may not be as huge as what we saw for the past two years, but we are still going to continue with cost reduction and efficiency gain in order to support our business growth further. Thank you.
Thank you. Starting from this year on, we do see some performance indicators being showing negative, great growth, so we're still very confident for the overall business growth. Let's welcome another analyst. Madame Shen from Huaxi Securities.
Thank you. My name is Shen Jun from Huatai Securities. I have a question regarding your corporate business. Just now, the management team has already mentioned Ping An Bank is firmly transforming and reforming its business. Your corporate business is also continued to be refined with some very good initiatives being proposed. I'd like to ask you, for the Ping An Bank, as you can see, the international volatility has been pretty huge, where in China, we just have the Two Sessions. In the corporate business, are there any priorities Ping An Bank may have? Especially last year, we found out your customer operations show a very nice growth.
How is that going to be translated into the future performance indicators? What will be the resources allocation and the target plan for the corporate business in the near future? Thank you.
Thanks. Let me just help to answer the question. Thank you. Well, for the corporate business in 2025, we still stick to what has been done for the past. We are there to see the retail business is undergone with industrial cycle, whereas for corporate business, the corporate loans being grown by 3.5%. The general corporate loans increased by 9.2%. The low interest yield bills being down by CNY 130 billion, and we believe there are some nice growth, I mean, by phase approach.
Well, if we take a look at what has been done in 2025, for Ping An Bank, our corporate business strategy is still be consistent following what has been mentioned before. That is, continue to have one blueprint to the end. We're still gonna be industrial specific, client specific, and providing refined operation. The 2025 is also the first year for the corporate business to go through reform. Overall speaking, what we do is to stratify the customer for further refined operation. For example, clients being divided into mid, small, and micro clients, and providing customer specific solutions and support. At the same time, we also continue with the business growth and with very nice growth. Generally speaking, there are some good progress being made. Let me just report to you.
First of all, regarding the customer for Ping An Bank, we do have a strategic KA account department providing 293 enterprises service. We also serve the family of enterprises and industrial upstream and the downstream. Even if we only have 293 group enterprises, we also cover their upstream.
Specific solution and making sure our operation will be a part of the customer strategy for those key account. We should also have full expansions, including extending customer, extending product coverage, and also extending the core. For those clients with good reputation, we hope that we will be able to support their assets, where for those customers and clients, we're sitting down with them to talk about strategy, international expansion, key projects and the digital optimization and renovation. Those are all that the management team of the group is interested. Only through the way we will be able to make sure the accounts operation could be a part of the corporate strategy, identify the possible opportunities for Ping An Bank. Like Mr. Ji has already mentioned, we hope the customer operation and the product could be well aligned.
Last year, we do have the advanced platform, considering the customer need in different industrial circles and leveraging our existing strengths and products to take care of the customer needs. By so doing, we hope we will be able to have a precision support to the customer. Generally speaking, compared with other large banks, Ping An Bank is still not having the pricing and the scale advantage. However, we do take care of the specific solution scenario by providing the precision solution. Secondly, we really want to be industry specific. In 2025, we made a solid progress in exploring into new verticals and industries. Just like mid-year report last year, we said that our cooperation with business and the risk to put risk control at the first place and to categorize industries into major categories.
We find different supply chain, and we discern our opportunities along the supply chain. For example, semiconductor, which is really at a height of the market. Everyone is paying great attention to that. We are looking for like several opportunities where we can get in easily and at a first stage. We are looking for industries that we have first starter initiative and to scale up gradually to go for quick iteration and to have our own policies in clients, channels and policies so that we can match with our clients. For the progress we made in last year, we have 6 lines in the corporate sector. No matter look at volume or price or risk control and the client's quality and revenues. In my perspective, I think they have demonstrated better performance than other corporate channels.
This encouraged us a lot. For the first two months in 2026, I think we have chosen the right path. Third, I would like to talk about Ping An Bank. We need to play out our own advantages. In several sectors, we have our own characteristics. Mentioned about the supply chain finance. For example, discounted bills and invoices, et cetera. We will cooperate with our distributors and vendors to make our business more granular and that our tools can be more adaptable for customers' real business scenarios, so that we can rely on their trust on our accounts and transactions, et cetera, so that we can find our value during this business. Car ecosystem is another scenario that we have built our advantage.
Third direction is that for iron, steel and their vendors and distributors. They contributed quite a lot to our asset growth and the deposit accumulation. Another scenario I would like to mention is trade cross-border finance. We rely on Ping An Bank headquarters with branches. We synergize together to run this platform and to make our five great accounts recognizable by our clients to provide one-stop solution for them. For disclosed number, we can see that for transaction bank, the total volume was almost CNY 2 trillion, grew by 2.3% year-over-year and cross-border finance volume total was CNY 330 billion and grew by 30% year-over-year. Those all demonstrated our results made in those specific business. We are also building our new products. Last year they have made improvements as well.
For example, our Digital Treasury Platform, we have group level clients altogether 4,400. It's a great improvement and growth. That's why in the future, we will hold on to our strategy and keep looking for the opportunities that we can better play out our advantages and gain or provide more value to our clients. Last year, our corporate client number, I would like to add, grew by 13%. All in all, I think our corporate foundation comparatively was quite weak, so we are trying really hard to be careful, of course, to accumulate our clients and to learn from the best players in the market. We want to be really selective and to hold on to our business strategy and be perseverant in doing corporate. Thank you.
Thank you, Mr. Fang.
Corporate has really made up the gap during retail transformation. Just like Mr. Fang said, we are doing selective corporate in customer products and business sector. They have laid a really good foundation for the whole bank's growth. Next round, I would like to ask Goldman Sachs.
Thank you for the opportunity. I'm Yang Shu from Goldman Sachs. You mentioned a really good phrase that you enter first and you exit first. Well, we understand that during retail transformation, you have reduced a lot of retail high-risk assets. We want to understand, going forward, what's your asset quality outlook, and also especially for retail, for consumer loans and car loans, do you have more detailed elaboration on that? When we talk about risk, we also talk about buffers.
Do you have enough buffers for future latent risks?
Yeah. Thank you. Thank you for the question. We're first addressing asset quality. The whole picture, like Mr. Xiang mentioned, I would say 2025 was a year of a stable risk performance. This is in line to our expectation. From disclosed metrics, NPL was down by 1 bp. Compared to our peers, it was quite good, stable, and formation kept decreasing. Provision coverage ratio decreased compared to last year, but still among the industry average. Let me break by retail and corporate. Retail, for fifth consecutive quarters, NPL formation have been going down, and also volume going down. That is to say we have basically digested retail NPL legacies.
2026, it will be a year that we continue to see this momentum, but I will say, the new assets in retail perspective is quite good. Of course, we have to balance between business growth and also risk control. You also mentioned about the mix in retail. Well, on one side, I mentioned for the existing part already digested. For the new part, for mortgage, for example, you are all concerned with, I would say for the collateralized, title deed loans, we almost digested, but it's still ongoing. For mortgages, we mostly was issued during 2021 and 2023. Overall speaking, I think our mortgage was under quite good risk picture. NPL ratio has been maintained at a stable level.
We mostly concentrated on the first and second-tier cities, and we take differentiated risk control measures. Of course, we felt the pressure on the mortgage side, but what I'm saying is that, the pressure is getting lesser and, new mortgage we issued are going toward a better, direction in asset quality perspective. Another part for corporate, you may noticed in the annual report, historically speaking, I think corporate NPL ratio was, really have been really low, like, range. Q1 2025 until second and third and Q4 , if you look at formation ratio, I think was under, like a stable, evolvement. In 2026, I would say the trend will be much better for corporate NPL ratio.
All in all, asset quality for Ping An Bank. I would say we already see the height of a risk digestion. For new issuance, quality has been a really good performance. The asset structure has been optimizing. That's why we project that in 2026, we will maintain a stable risk performance. Provision coverage ratio will maintain at a reasonable level. Thank you.
Thank you, Mr. Wu. Just like he said, we are seeing a good turning point for retail digestion and a good momentum for risk performance. Stable asset structure will be a solid foundation for future growth. Okay, next question. The lady over there.
Thank you. I'm Ma Dini from Guotai Junan Securities. Well, Mr. Ji mentioned a lot measures we have adopted during retail transformation, while the market concerns very much about retail. In this regard, you mentioned turning point, can we say we already reached the turning point? And in 2026, can we see some recovery in business performance? And what's your outlook for wealth management business? Thank you.
First of all, thank you all for the support for Ping An Bank, especially for retail business. Regarding your question, I will try to answer from several perspectives. First, results, and second, outlook. For the past two and a half years, we have adopting proactive transformation in retail business, optimize risk policies, and restructured our growth momentum. After this round of adjustment, I will say retail business already passed its most difficult times. Just like Mr. Ji said, the most difficult time has been behind us. Several key metrics have seen improvements, noticeable improvements. That's why we can say the turning point already shown, and we are in the right track to recovery, to growth. Four perspectives I would like to elaborate. First, asset quality greatly improved. We adopted differentiated real-time risk policies and customer management.
In 2025, NPL ratio for retail was down by 1.16. Second, total retail balance stopped decline. At the year-end, though it was down by 2.3%, but comparing the end of 2024, it was narrowed by 8%. QQ speaking, in the first half of 2025, our retail was down by CNY 41.4 million. The second half, it rebounded to positive growth. Starting from Q3 , I would say it basically stopped the decline. We almost digested all the high-risk retail loans. For credit card, since the second half, it has rebounded to positive growth, though a little, but still it's a positive growth. For credit card, for the circulating assets, I think they are rebounding to a positive growth and laying a solid foundation.
At the same time, for auto finance loans, as well as the individual multi-loans, has already maintained a positive growth for the full year, grow by 3.7% and 8.9% respectively. At the same time, we have the Orange e-loans and orange credit loans also making new value contribution. The balance is already more than CNY 30 billion. To some extent, the loan has already stopped reducing. Thirdly, that is the structure of the operating and managing business as one. The most important one is the deposit business. We leverage the diversified use case to improve the high quality deposit improvement, especially the daily average current deposit is being increased by 2.3%. As we grow the deposit, the interest LPR is being down by 36 basis points with great efficiency gain.
For the wealth management, we continue to optimize the structure. We not only seek for the high quality deposit. Whereas for bank insurance, for corporate loans, they are all maintaining good growth. Overall speaking, our Ping An wealth management fee increased by 50.8%. At the same time, the agency insurance fee increased by 53.3%. Fourthly, the improvement of the operational efficiency is being greatly demonstrated. In 2025, retail business revenue down by 30.5%. Compared with 2024, it's been narrowed down by 12.4%. The slope of the decrease being smoother and slower.
While at the same time, as we continue to optimize the customer base and improve the corporate empowerment, loans with declining trend, the net profit of retail business has started to see the nice recovery and continue to improve the efficiency of our credit business and become an important contribution to our overall profit. Actually, the inflection point of our retail business has already started to show up. As you are asking, how we're going to move forward with retail business?
In 2026, as we continue to allow the loan business to return to growth, along with the high-quality development of the Ping An and wealth management, we believe the retail business revenue and profit will continue to increase and improve. As we improve the efficiency, we will also strengthen and optimizing the customer base and the business structure. Retail business need long-term operation. That's the reason a few things we need to be keeping in mind. First one is long-term and short-term. By emphasizing on the long-term operation and the short-term return, we still need to maintain a substantial business growth and a sustainable approach. Secondly, we need to strike a balance between efficiency and the scale. Thirdly, we will also strengthen the business and the risk-coordinated development, and making sure we build the synergy for value and efficiency creation.
Fourthly, that'll be the online and offline channel integration. We're leveraging online channel to further expand the service coverage, leveraging the offline channel to build a close relationship with the customer, providing a seamless customer experience. All that need us to work on the system, the details, and work on the standards, making investment, and keeping a down-to-earth attitude to maintain healthy growth of the retail business. Regarding what we need to do in 2026, I have three points. First of all, customer operation. For Ping An Group, we have 250 million customers, including customers from insurance, bank, securities, and medical service. We also formed a well-established financial ecosystem. We understand we have diversified and unique needs from each customer.
Ping An Bank would be happy to be a part of this ecosystem by providing precision customer stratification and differentiating the product and interest. We can support our customer with the wealth management and the health solution providing. We're also going to continue to optimize our pocket bank app, making sure the online operation for the customer and offline customer communication would make us as a companionship. We are worry-free and money-saving, and we should also make it into reality in customer service. Regarding the business development, for the loan structure, we will also do further optimization. Besides working on our cornerstone business, we will also continue to release the mid-range yield asset business with more capacity and efficiency gain.
We're also going to improve the customer loans and improve the wealth management, leveraging AI app to making sure we have a good product allocation to the customers and continue to seek for continued and sustainable development of the wealth. All those development are in need of the great team. We're also going to continue to strengthen our team building. We really would like to make a customer-centric account manager, team growth pathways, continue to improve the team in customer acquisition, customer operations, and customer support. Really make our team who understand the wealth management, the customer need, and financing. In the first two months of this year, along with the indicator improvement from 2025, we already started to see the trend of retail business going back for growth. Even the growth might be moderate, but the trend is already starting to show up.
We're still going to be customer demand centric, creating value to the customer, and also drive the high quality growth of the retail business. Thank you.
Thanks for Mr. Wang. Thanks for keeping us the updates regarding the retail business. It's a key for our transformation and the strategic development. Let's welcome one more analyst, please. Thank you.
Thanks for the management. I'm a banking analyst from CITIC Securities. My name is Xiaofei Fei. Just now, as the management has already mentioned, the asset quality has been good. Many investors are worried about the asset quality of the property market. Are there any trend for the entire property market, especially the loan quality? What would be your outlook, especially for those key account, what the risk trend might be? Thank you.
Thanks for your question.
Let me help to respond to the question regarding property market. In my first answer, I have already mentioned the overall asset quality has everything to do with property market. Let me just dive deeper to respond to your question. Let's first talk about our corporate business. In 2025, property market is still undergoing profound adjustment. Many of the enterprises and the developers are on the capital chain, especially the private companies. Some of them are seeing increasing risks. We are also somewhat being impacted. NPL ratio of the property is being elevated compared with 2024, but still our data is lower than the industrial average. As I have already mentioned, in 2025, in Q1, we do see some concentrated risk or exposure made by the property developers. Starting from Q2, we will control the non-performing loans and our loan collection also started to show good result.
I can firmly tell you the peak time for risk generation for property market is already gone in Q2, Q3, and Q4. At that time, the NPL ratio is 2.2%-2.5%. The exposure is being further stabilized. I also see some reversed trend in this year. Well, as you were talking about the key account in property market, what did we do for them? I think majority of the risks for the property market are the loans being released before 2021. For key real estate companies, we have the one company, one specific solution. We are actually taking care of the project launch, evaluation of the structures and the risk management. For key account risks, right after 2025, majority of those risks being well managed. Exposure is quite limited.
As far as I know, for the existing key account, the risk is still controllable. Assessing their market performance, well, the property market, we have collections, and we also stick to the collections-based solution for property market. The asset quality of the property market is truly resilient. We also continue to step up on the collection efforts. I can confirm with you in 2026, we have improved the asset quality in the property market. However, you can see the national policy indicate the property market need to be stabilized. We're going to follow the national policy for making adjustments accordingly. For retail business, mortgage is improving and the collections being further improved. Incremental mortgage growth is still looking bright. For main risk performance and anti-fraud risks, we can say the new loans issued, the underlying asset quality is pretty good.
Overall speaking, the risk is manageable. In 2026, for sure, I have to admit, there are some pressure for property market, but the risk is controllable. Thank you.
As being mentioned, for property market is being quite prudent, well manage the loan size and the risks, and also making enough provision. We also see some positive signals from the property market. We have every confidence to well manage the risks. Let's welcome one more analyst. Thank you.
Thanks for the company. My name is, Li Chen from CITIC Construction Investment Securities. I have a question regarding deposit. The interest rate is pretty low, and actually mortgage movement is something that the market has been discussing now. Did you actually see the deposit is moving from one place to another? Do you have pressures in further growing the total volume of the deposit?
With such an industrial background, are there any new ways or measures you may have for wealth management? You were talking about deposit movement. Is it resident deposit?
Yes. Thank you. Thanks for the question. Let me just share with you some of my personal comments and insights. As deposit interest rate has been going down, with the change of the capital markets and also the improved expectation from the investors, we have already noticed for our bank, no matter for individual consumer or retail consumer, their risk preference has started to change. All together with overall stability of the yuan, and we see that the product with equity product contributions being improved, while the diversified product portfolio is being further needed by the market.
As we are in phase of the market changes, what we need to do is that, first of all, we just firmly follow the market trend, continue to well adjust the structure for asset and deposit. Secondly, still take care of the customer need, provide good product portfolios and allocation service. Let's go back to the problem, question regarding deposit. At least for Ping An Bank, for the past one year, we need to make sure the size of the deposit is still increasing with a very stable pace. Our asset AUM is also show some stable and nice growth. Well, judging from the AUM, you can see part of those deposit are not lost to anyone else. It's still within our wealth allocation system as just, being, showcasing more effective asset structure.
You ask me how we're going to take care of the deposit AUM and how we're going to be ready for the changes in 2026. I will still have some arrangement in place. In 2026, for retail deposit, we still would like to stick to volume price balance. By optimizing the liability cost, we still want to maintain a steady growth of the deposit size. There are two things we need to do. First of all, we need to work for the long-term deposit, and then to have an overall arrangement of the asset allocation for long-term deposit materially. We're not gonna renew them at a higher price of renewal method. We're going to have the online management and the portfolios being provided to the corresponding customer to take care of their needs.
Making sure when the deposit is being materialized, and we can actually engage new funds from the market in order to strengthen the client's connections with Ping An Bank. Secondly, we'd like to build and dive into more use case to further improve the high-quality deposit. In 2025, we have the high-quality deposit and the current deposit. Its contribution has been improved by 2.3%.
A significant improvement. We continue to tap into new use case, especially the transaction use case like customer financial management investment, payment, and the payrolls, as well as the bank security transfer, the capital security. In 2026, we are still going to work on those high frequency and rigid use case to continue to improve the customer activities and the loyalty. Only in that way will we be able to continue to further improve our business as a whole. No matter for deposit business or for other business, the deposit is being further allocated within the PM Bank with optimized allocation. Thank you.
Thank you, Mr. Wang. This topic I think is a natural trend, so you have to maintain granular management so that you can get more deposits to deal with the situation at ease.
Because we have friends from media to ask questions, last question from an analyst. Let's have the last question here from the analyst.
Thank you management. I'm from Morgan Stanley, Chiyao Huang. My question regarding on dividend and Q1 . Do you have three to five -year plan for dividend payout policy? Second question, because we've noticed that replenishment projects have been on the rise in the Asia market. Do you have any plan on that? Thank you.
Okay, let me take your question. I'm CFO. From dividend payout perspective, our principle has always been, first, we pay great attention on investors, what they really need. On the bank side, we try the best we can do. Our payout ratio was around 20%-30%, this range.
Around this guideline or requirement, we are doing timely adjustment. Our Q1 last year was 9.36%, mostly supported by organic growth. In the future, short-term speaking, 9.36%, I think, is we already made regulators' requirement, and we have some good buffers. Going forward, we don't think we will have really quick asset growth. The demand on capital will be quite stable, and we would like to rely more on our organic capital growth. But of course, last year, you may notice that we have issued perpetual bonds. For those interest-bearing bonds, we are doing timely replacements if the price is right for us, because some they will come due in recent years. We will make appropriate arrangements. For dividends, let me say that again.
First, we pay attention, pay great focus on investors' needs. Secondly, we will do what we can.
Yeah, thank you.
Okay, thank you, Mr. Xiang. We have gathered some questions that the market cared most about. Also, in line with the regulators' requirements, this is among the top concern for the dividends question.
Okay, so we will move into the media QA session.
Okay, first question. This is a really important year for the 15th Five-Year Plan, and also, my question is regarding what your plan regarding return to growth strategy and also deliver on the Five Major Articles. What specific initiatives are in place?
Okay, I simply answer your question because the management team has touched upon the question. This is a really important year, beginning year for the 15th Five-Year Plan.
All sectors, business and industries, they are moving really fast. They're planning, mapping out. Like, the Board Secretary said, we will strive to the best to gain the first start initiative. There are some requirements, new requirements from the government. As a really important player in the banking sector, Ping An Bank has uphold the principle that we will answer the call and also with the aim of return to growth. We have made a string of specific moves to fulfill what we have been required. I would say four things we need to uphold. First, Party-guided management. I just elaborated on my speech, we will put Party related mindset into all aspects of our business to build deep integration with the Party awareness and also business guidelines, and we'll have right mindset towards our business performance.
We have issued this to all across the bank, headquarters and branches, and we uphold to support the real economy, to serve the real economy with the long-term aim. With the optimization of our own asset structure and better asset quality performance, we know it's difficult, but we have to do that so that we can achieve right development. Second, we need to uphold to enhance our capability to serve the Five Major Articles and put this as a guideline for our bank's strategy, in resource input and upgrade product mix so that we can build our differentiated advantage and to build our capacity in green finance and pension finance, et cetera.
For the 100 and more important projects we will try our best to participate in and pay close attention to capital markets and real estate industries, see what changes in those industries and to make corresponding arrangements and to support the virtuous circle of economy. We will be strictly anti-corruption and to follow the guidelines from the regulators to stabilize our NIM and to enhance our channels and to strengthen our risk-based pricing. We will forbid any unregulated behaviors such as illegal deposit gathering with low interest rates and also strict control on the agency channels so that we can construct our differentiated advantages. NIM, like I said, was 1.78% last year. I think among joint-stock banks, it was at a quite comfortable level.
That is, result passed by the Four Upholds and we always prioritize risk control. On the one side mechanism, we need to put more efforts to improve on it and to be more proactive and to discern risks at an earlier stage and also we'll use asset restructuring and write-offs such measures so that we can maintain provision coverage ratios and buffers at a quite good level, so that the whole bank's operational performance can be at a sustainable level. Just like I reported, our NPL was 1.05, and the formation was down by 1 percentage point, and provision coverage ratio was 221% in 2025. Overall speaking, I think they are at a quite good level.
We will respond to the whole society, to the whole China economy, so that we can play a good part to the beginning year of the 15th Five-Year Plan. Thank you.
Thank you, Mr. Ji. The second question.
Thank you. I'm from Xinhua News Agency. The outline of the 15th Five-Year Plan calls for deepening the development of Digital China, advancing intelligent and digital capabilities, and the expanded application of AI plus to empower economic, social, and governance development. Ping An Bank has long championed technology-led development and has been a pioneer in fintech. Could you share. You have just shared some developments in AI-related perspectives, but could you further share what distinguishes the bank's thinking and approach to AI-driven transformation? What progress have you made so far?
Thank you for the question. I will take this question.
Of course, AI has been a really top hot topic for the market and also banks. Like you said, no matter for the Ping An Group and Ping An Bank, we always prioritize this as a key strategy. Of course, technology has been evolving really fast. With the application, we have to keep pace with the new developments. With the new round of AI-driven, AI plus finance, we need to think about what we can do well and how to play a better role in that. In this new era, AI plus finance, I think is a really key strategy for Ping An Bank as well.
The tasks from the foundation for technology, I think is very important. At first place, we need to enhance our technology input in AI, underlying logics building. In application perspective, we focus on accurate marketing and accurate risk control and also digital service. Those are all important for us to provide better financial services. We have been putting resources and inputs in those areas for all those years. Mr. Ji mentioned that we need to scale up our input into those areas because as we input more, we will bear more fruits from that. For example, in cost-saving side, in retail, we have AI marketing platform. In this platform, there are a lot of innovative ideas that are generated by AI automatically. We have made a rough calculation for this business.
We have saved CNY 60 million from this project and plus many other achievements. Like Mr. Fang mentioned, a lot of products can be customized online. These greatly improve our efficiency as well. Also another part, robot AI customer service in this site. For every application we launched, we are encouraging every employee of the bank to better master how to use it, how to improve their productivity as well. Of course, in risk control, there are a lot of underlying technologies have been built. Overall, what I'm trying to say is that in the foundation, we are trying to enhance it. Ultimate goal for this capacity building is that we can better improve our risk control service and so that we can increase efficiency and productivity. This is the ultimate goal. Thank you.
Ping An is a company with technical genes. While just having the technical leadership with AI empowerment, we're going to continue to improve the efficiency for AI application. Many projects are on the ground now, and let's just wait and see. Let's welcome the next journalist, please.
Hello, everyone. I come from China Securities Journal. Last year, we see that in China, the financial regulator launched a discounting personal consumption loans. You are among the first bunch of the companies doing so. What are the specific measures? What about the progress of those measures? How it's going to contribute to your retail credit business? Thank you.
Thank you. Starting from last year, you can see that Ministry of Finance, People's Bank of China and the National Financial Regulatory Administration, when they first started to have the financial system for the personal consumption loan last year, we have already take a fast strategy implementation. We attach great importance to that with fast implementation. We have already established a special working group, including retail risk technology planning in August of 2025. We have already provided the financial discount on personal consumption loans system ready. In first of September, the system being put into operation. In January of 2026 for Ping An Pocket Bank. We also started to launch the credit card installment bills discount business to respond to the national policy.
Secondly, we also provide user use case specific service. We have already optimized the payment term and also the corresponding policies for consumer loans, improve our product competitiveness, meeting the financing needs of the consumer. For credit card, we are closely follow the national strategy of improving domestic demand and consumption and benefiting people's livelihood, rely on the due attributes of the credit card repayment and credit card business and continue the treating policies. We actually continue to further optimize the user experience even for the zero interest installment for certain discount or use case. We'll also be able to continue to improve and encourage the purchase of the auto. Thirdly, we simplified the process to optimize user experience.
For the discount system online, no matter for application, for review, for inquiries or even the progress and the procedure, we always find the most understandable and most pervasive ways of talking with the customer so that we can help to reduce the manpower need to be input by the consumer. Generally speaking, starting from September of 2025 when discount policy is being implemented, our
Consumer loan are still maintain a good growth. Monthly loan distribution has been increased by 10%. Until now, the interest discount for personal consumption loan is close to CNY 26 billion, providing support to 590,000 individuals. This policy can actually help to activate and mobilize the consumptions for the society. In the near future, we're going to follow what the Ministry of Finance and the National Financial Regulatory Administration needs, continue to cover more scenarios and optimizing the intelligence operations, providing more data, improving the customer experience. For Ping An Bank, we will continue to stick to our original aspiration of finance for people. Continue to embrace the policy, providing high quality and people-oriented and efficient service to expand the domestic consumptions, serving the country and contribute Ping An power to high quality development of the society.
Thank you.
Next one, please.
Thank you. I have a question to Mr. Xiang. Just now as I was listening to the presentation, I noticed that you mentioned the fee reduction and the cost reduction. So I'd like to ask you, cost reduction and efficiency gain, is it something as a structural thing for Ping An? And it won't be always reduced at. And there are some use case that may have the cost reduction efficiency gain, but not always on the downside, right?
Thank you. Yes, indeed. In the early stage of the transformation, we have to think about the cost reduction and efficiency gain. As we are trying to proactively reducing the high-risk asset, then the revenue will surely go down. Then we have to identify some alternatives that can help to mitigate the impact on our profit.
Cost reduction efficiency gain is a way. However, we're not just simply reducing the cost. The system and the technology and the procedures need to be done. Let me just give you an example. Just now, as President Ji has already mentioned, we have a smaller first floor and a larger second floor. We have already did the fine-tune over the GFA of our branch. In the past, we have a larger first floor, but the rent of the first floor is always pretty high. We did a refined arrangement of each branch and making sure we have the right GFA adjustment for each branch. We also have the technology and the procedures being further optimized, reducing the GFA on the first floor without compromising the consumer experience. This is very important.
While at the same time in our daily office, and we need to have some so-called standardization and help to reduce redundancies, same as technical application. We leverage the technological ways of continue to improve the efficiencies of each individual. In the past, we need many people to generate the slides and many, many work. Now with technology, some of the work could be done by technology. The work efficiency would therefore improved. This is actually a systematic work for cost reduction and efficiency gain, along with adoption of cutting-edge technology. For the past two years, at least for fee management, I believe it's actually a systematic work need to be done. Still, more work need to be done in the near future. But for sure, for example, new product R&D still need more investment.
We also mentioned with the new round of the AI technology, the foundational model, artificial intelligence and the data foundation along with the past legacy system and hardware upgrades are all need to be done. We need to put more investment for that. While at the same time last year, we also have the new generation of the core system that need to be put into operation to support our routine business. In our daily marketing, the customer marketing are still need the certain investment, but for sure we need to take care of the ROI. In 2026, we're going to continue the cost reduction and efficiency gain. Technological iteration takes time to transform from a qualitative to quantitative development. The small first floor and the larger second floor initiatives being started from 2023. We now cover more than 300 branches.
In the near future, we're going to continue to reduce cost while improve efficiency. Thank you.
We are actually making sure we reduce cost while improving the efficiency and to have the further refined and high quality development. Let me just welcome another analyst.
Hello everyone. I come from Southern Weekend. My name is [Li Heming] . I have a question regarding five major articles, especially on Fintech. My question goes to Mr. Fang. In 2025, what key initiative has Ping An Bank took in technology finance or Fintech? What's the result that's been delivered? What would be your outlook in 2026?
Thank you. Ping An Bank's been follow the national strategy and the needs of the regulator. We take high quality development as our guide and continue to work on the five major articles.
The fintech or technology finance is actually the most important one among the five major articles. Starting from 2025, the technology is been developing very fast with multiple innovations on daily basis. That really encourage Ping An Bank and help to firm our our determination to go for technology finance as a breakthrough to our five major articles business. Overall speaking, Ping An Bank, we have a multidimensional way of serving the technology finance. What we're trying to do is to build a service that can cover the whole lifetime of the tech companies. First of all, we provide the organizational support. We have the one plus twelve plus N overall structure. With the headquarters, we have a technology finance department, and we also have our technology center in 12 branches.
We also encourage some branches of establishing the technology highlights and features and specialized teams. Till now, we have 10 distinctive sub-branches with 33 such specialized management teams. We have the headquarters to branch to specific technology-oriented team as a multidimensional service team. Secondly, regarding resources allocation, we do provide some resources for the technology finance. For some company, we do provide the subsidies. For example, 30 bps incentives. Many of the high-tech company enjoy such subsidy policy. Secondly, five major articles being built into the KPI system of the branches. We do have the parameters of serving the real economy, and the technology finance is one. We also provide the support to the credit loans.
In 2025, Ping An Bank also issued the first LPR floating interest rate and innovation bond with a total quota of CNY 6.5 billion targeted for the technology loans only. We also have the PE VC loans as well as innovation, tech innovation loans helping the enterprises to navigate the financial needs in the entire life cycle, including initial growth, mature stage, and the expanding stage. We do have product to take care of each stage of the growth and helping the companies to get the credit loan support at a different stage. While Ping An Bank, we also provide the loan supply chain liability integrated financial service. We are working with Ping An Life Insurance on completing a financing support to a company with a total sum of CNY 80.75 billion.
Last but not least, regarding the credit approval, we are providing the specialized support for the hidden champions. As long as those companies are within the national high-tech certifications and the SRDI certification, as long as those companies meet those criteria, they will be able to enjoy the support. With regard to the green channel for credit approval, we're actually reducing the redundant processes of supporting them. Thirdly, we also have the online and offline synchronized support, leveraging data and insights to help to reduce the burdens for the enterprises. In that way, we can improve the approval rate for the S&T and the technology loans and streamline the service process.
In 2026, we're going to stick to, as we mentioned in the Fifteenth Five-Year Plan, to support the new productivities, especially in new energy and advanced manufacturing and commercial aviation. We're going to provide corresponding support and the resource allocation there, while also keeping an eye on the new productive force, including artificial intelligence, brain-computer interface, and also the embedded AI and the quantum computing. Till now, they are probably just an emerging industry, but in the near future, those are the industry might be a key focus for the banking sector as a whole. Ping An Bank would like to leverage our own efforts to make our due contribution to building China into a strong technologi cal power. Thank you.
Thank you for the technology finance. Ping An Bank, we have a 16-1 system, and we also have many good cases.
Ladies and gentlemen, due to time reason, we only accommodate the final question. Let's welcome our final journalist, please.
Good afternoon, management. I'm from Shenzhen Commercial Daily. You mentioned for your risk have been digested to a later time spot. You mentioned about growth of retail medium yield products and it's gaining momentum. My question is how much volume you already had for this type of product and, for the risk performance of those type of products, and what's your goal for longer run?
Okay, thank you.
First, in 2025, we have made up our mind on growing this type of products, and the volume has been growing steadily. At the end of 2025, altogether balance was above CNY 30 billion. As the quality maintained at a stable spectrum, we expect in 2026 the volume will still keep growing. Of course, we have to maintain the asset quality is at a stable range. During this process, we think the key is to dig deeper into subsectors, and we have developed region-specific and customer-specific solutions for such medium-yield retail products. We are leveraging corporate and retail synergy as well. Over the past years accumulation, we are focusing several aspects much more. First is customers. We need more accurate risk assessment for those clients, and we can issue a whitelist in the batch.
This can help us improve efficiency and do better risk control. Second, we're utilizing AI. We are building product factories to make it modularized and can be applied in a really quick way and react faster to market demands so that we can realize really like customization for different customers to provide more customized experience. Third, we are balancing volume, price, and risk. During the issuance process, we will put risk in a more priority place and to make more accurate risk control and to enhance our capability in risk-based pricing and keep adjust our balance between risk and price. We have a portfolio goal, and we will do whatever we can to achieve a balanced growth in middle yield products so that we can have balanced results. Thank you.
Thank you, Mr. Wu.
Due to time limit, this brings to the end of our Q&A session. As of now, we have over 210,000 viewers, and we will do the best we can to answer the market's concern and to promote material changes in our operational performance and enhance our conversation with the market and to transform our intrinsic value into investment value. Thank you all for the trust and welcome your suggestions from all channels. This is the end to our annual results conference. Thank you all for participating, and see you next time. Thank you.