Shenzhen-listed lender Ping An Bank posted revenue and net profit increases last year as a result of its retail banking arm's rapid expansion.
According to Xinhua, the bank, controlled by Ping An Insurance, increased net profits by 7 percent at 24.82 billion yuan in 2018. A statement submitted to the Shenzhen Stock Exchange on Wednesday revealed that last year's growth exceeded that of the previous year at only 2.6 percent.
Revenue, on the other hand, increased by 10.3 percent, accounting for 116.72 billion yuan in earnings. Ping An Bank said the growth figures were largely affected by its retail banking arm's fast expansion. This particular department accounted for over half of the bank's total revenue in 2018.
Despite its stellar performance in revenue and net profits last year, Ping An Bank Co. was China's least favored banking stock. However, its latest posting gained the attention of investors as its retail banking service continues to prove strength amid the economic slowdown.
Bank shares soared by 39 percent this year, allowing the lender to bounce back from last year's painful share losses. The hike is the biggest figure yet on the CSI 300 Banks Index, Bloomberg reported.
Analysts noted that Ping An Bank's upward motion may continue this year, citing softer competition in Shenzhen and higher returns than in corporate lending settings. A Shanghai-based analyst at Capital Securities Ltd. said, "Ping An and China Merchants Bank have a lot in common. But the latter trades at a much higher premium, which I believe reflects its fair value, so that means Ping An shares can go up more."
Dubbed as the Chinese economy's king of retail banking, China Merchants Bank traded 1.6 times higher compared to Ping An Bank at only about 1, according to data collected by the outlet.
Furthermore, Ping An's bad loan ratio in its retail banking sect only stood at 1.05 percent. These figures are lower than the numbers recorded by corporate lenders, which is 2.49 percent. Analysts pointed out that the figures are proof of retail banking's ability to provide stable earnings and operations that are less consuming in terms of capital.
Shine News reported that the Chinese bank said it is committed to continuing applying cutting-edge technology within its business lines as part of its transition to retail banking. The bank will adopt technological applications in marketing and risk control operations to maintain its good performance.
Last year, the bank dished out 2.57 billion yuan on information technology and expanded its workforce by 44 percent year-on-year.
