Ping An Profit Rises as Premiums Grow, Banking Income Climbs

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What's Behind Ping An's 18% Rise in 1H Profit?
  • Increase in net income contrasts with declines at major rivals
  • Insurers’ 1H combined profits slumped 54.1% on stock losses

Ping An Insurance (Group) Co., China’s second-largest insurer, said first-half profit rose 18 percent as growth in premiums and banking revenue helped offset the impact of stock-market declines that have hit rivals.

Net income climbed to 40.8 billion yuan ($6.2 billion), or 2.28 yuan a share, in the six months ended June 30, from 34.6 billion yuan, or 1.90 yuan a share, a year earlier, the Shenzhen-based company said in a statement to the Hong Kong stock exchange on Wednesday.

A 6 percent profit increase at the company’s banking arm and higher premium revenue helped the more diversified Ping An bolster net income even as declines in the nation’s stock market caused a slump in Chinese insurers’ combined profits. Rivals including China Life Insurance Co., New China Life Insurance Co. and China Pacific Insurance (Group) Co. have all forecast first-half net-income declines larger than 40 percent. 

Ping An said its investment income fell 33 percent in the first six months from a year earlier to 55.6 billion yuan. The firm recorded 9 billion yuan in realized investment losses, reversing from 42.7 billion yuan of gains a year ago, according to the statement. Net investment income, mainly dividends and interest income, jumped 52 percent.

Combined Earnings

Net premiums earned rose 27 percent, the company said. New business value, which gauges the profitability of new life policies sold, expanded 43 percent.

Insurers’ combined profits slumped 54.1 percent in the period from a year earlier, largely due to share-market declines and higher expenses, the China Insurance Regulatory Commission said last month. Returns from equities totaled 24.1 billion yuan during the period, down by 261.2 billion yuan from a year earlier, data from the regulator showed.

Ping An’s Hong Kong shares fell 1 percent on Wednesday to HK$39.70, widening this year’s loss to 7.7 percent.

— With assistance by Dingmin Zhang

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