Ping An Bank: Investor questions on revenue, interest margin, and dividends; the Secretary of the Board responds

Investor Questions:

Hello, Secretary of the Board. As a long-term individual investor, I would like to ask a few core questions: 1. In 2025, revenue and net profit have declined for two consecutive years, and non-interest income has decreased far more than interest income. However, wealth management fees have grown against the trend. What is the core drag on non-interest income? Can we expect a revenue turning point in 2026 through structural optimization? 2. The net interest margin has dropped to 1.78%. Under industry pressure, what is the company’s differentiated path to breaking through? Is there a clear target for interest margin control in 2026? 3. Currently, the dividend payout ratio is lower than peers. If profits stabilize, will there be an increase in the dividend payout ratio to enhance returns for small and medium shareholders?

Secretary of the Board’s Response (Ping An Bank SZ000001):

Hello. In 2025, our other non-interest net income was 19.527 billion yuan, a year-on-year decrease of 33.0%, mainly affected by market fluctuations, with non-interest net income from bond investments and other businesses declining. With the continued deepening of strategic reforms, some of our operational indicators have shown positive trends, laying a solid foundation for sustainable healthy development in the future. Regarding the net interest margin, it was mainly affected by factors such as declining loan rates and adjustments in business structure. In 2025, our net interest margin was 1.78%, a decrease of 9 basis points compared to 2024, but the decline has narrowed compared to the previous year. Against the backdrop of asset repricing and support for the real economy, the net interest margin is still expected to face downward pressure, but the magnitude of decline is expected to ease. We will continue to strengthen asset-liability portfolio management, refine pricing management, and provide forward guidance to alleviate the downward pressure on the margin. Regarding dividends, we disclosed our “2024-2026 Shareholder Return Plan” on April 20, 2024, which stipulates that the profit distributed in cash each year will be between 10% and 35% of the distributable profit achieved in that year. We will consider regulatory capital adequacy requirements and changes in operational development, act within our means, and strive to ensure the continuity, stability, and reasonableness of shareholder returns, fully safeguarding shareholders’ rights to investment income. Thank you for your attention.

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