Ping An Profit Rises as Investment Returns, Banking Income Climb

Ping An Insurance (Group) Co. (2318), China’s second-biggest insurer, said first-quarter profit rose 22 percent on higher investment returns and increased revenue from banking operations.

Net income climbed to 7.39 billion yuan ($1.2 billion) from 6.06 billion yuan a year earlier, the company said in a Hong Kong stock exchange filing yesterday. Net premiums earned rose 14 percent to 77.3 billion yuan and investment income, mainly interest and dividends, “grew steadily,” Shenzhen-based Ping An said.

Ping An joins bigger China Life (2628) Insurance Co. in reporting higher profits on improved performance of investments after absorbing losses last year amid weak equity markets. Ping An Bank Co., a unit, reported a 4.7 percent increase in profit.

“Ping An’s profit expansion this year should look fairly good after last year’s impairment losses,” said Xie Jiyong, a Shanghai-based analyst at Capital Securities Corp. (6005) “Banking profit growth would probably slow down” as last year’s interest-rate cuts erode margins.

Ping An’s investment losses jumped almost 10-fold to 9.5 billion yuan last year and impairment losses more than doubled, the company said last month.

China Life reported on April 25 a 79 percent jump in profit for the first quarter as investment returns increased and impairments dropped 89 percent. Smaller China Pacific Insurance Group Co. on April 24 reported a 241 percent jump in net income for the same period.

Ping An rose 0.9 percent to close at HK$60.15 in Hong Kong trading yesterday, before publishing earnings, trimming this year’s decline to 7.3 percent. China Life gained 1.5 percent to HK$20.90.

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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