Ping An Says Profit Rises as Banking and Premium Incomes Expand

Ping An Insurance (Group) Co., China’s second-biggest insurer, said profit rose 3 percent last year as banking income expanded and premium income grew.

Net income climbed to 20.1 billion yuan ($3.2 billion), or 2.53 yuan a share, from 19.5 billion yuan, or 2.5 yuan a share, a year earlier, the company said in a statement to the Shanghai Stock Exchange today. The profit compared with a 21.37 billion yuan mean estimate of 27 analysts surveyed by Bloomberg News.

A 30 percent jump in profit at the banking unit and higher income from premiums helped Chairman Peter Ma bolster earnings as insurers struggled to recoup investment losses from a 20 percent slump in the benchmark Shanghai Composite Index (SHCOMP) in 2011. Bigger rival China Life Insurance Co. (2628) said Feb. 28 that annual net income probably dropped about 40 percent on lower investment yields and increased impairment losses.

“The contribution from banking was relatively big and that helped smooth out the decline in profitability” at Ping An’s insurance operations, said Olive Xia, a Shanghai-based analyst at Core Pacific-Yamaichi International Ltd. “Investment returns should be better this year if the stock market doesn’t do badly.”

Net unrealized and realized losses reached 9.5 billion yuan, while net investment income totaled 41.6 billion yuan, according to the statement.

The Shanghai Composite Index is little changed this year, after rising 3.2 percent last year -- following two back-to-back years of declines -- amid signs the nation’s economic growth is stabilizing.

Share Price

Ping An (2318) fell 0.3 percent to HK$61.90 in Hong Kong trading, extending this year’s decline to 4.6 percent. The Hang Seng Index has lost 0.2 percent.

Ping An Bank’s profit surged to 13.4 billion yuan last year after non-interest income jumped 54 percent, the Shenzhen-listed lender said March 7. Ping An in 2011 folded its banking operations into Shenzhen Development Bank Co. following an acquisition, and renamed the combined lender last year after its old banking arm.

HSBC Holdings Plc last month sold all its 15.6 percent stake in Ping An to Thai billionaire Dhanin Chearavanont’s Charoen Pokphand Group Co., pocketing a $2.6 billion profit as the bank exited a decade-long investment to help revive earnings.

To contact Bloomberg News staff for this story: Zhang Dingmin in Beijing at dzhang14@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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