OREANDA-NEWS. November 11, 2014. Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An” or “the Group”, HKEX: 2318; SSE: 601318) announced its unaudited results for the nine months ended September 30, 2014.

For the first three quarters of 2014, the Company’s three key pillars of businesses, namely insurance, banking and investment, achieved sound growth, driving the rapid and healthy growth of the Company’s overall performance. On a year-on-year basis, net profit rose 31.3% to RMB38,674 million, while net profit attributable to shareholders of the parent company grew 35.8% to RMB31,687 million, surpassing market expectations.

As at September 30, 2014, equity attributable to shareholders of the parent company stood at RMB218,678 million, up by 19.7% over the beginning of the year; total assets reached RMB3.86 trillion, up by 14.9% over the beginning of the year. The Internet finance business also grew rapidly in step with the traditional business, with a spike in the user base and transaction volume.
To encourage the management and core staff to focus on the Company’s continued long-term business growth, and to protect and raise shareholder value, Ping An has launched a key employee share purchase plan for approximately 1,000 of its staff. Management and core staff may use their salary and bonus to purchase the Company’s shares in the secondary market.
 
Insurance premium achieves rapid growth with a sound quality

For the first three quarters of 2014, the insurance business achieved stable growth with sound quality. Written premiums of Ping An Life rose 15.4% year-on-year to RMB191,724 million. Of this, written premiums for the more profitable individual life insurance business reached RMB177,976 million, up 14.3% year-on-year. Written premiums of new businesses were up 19.9% year-on-year, reaching RMB42,325 million. Written premiums from telemarketing reached RMB6,735 million in the first three quarters, up 41.6% year-on-year, enabling the Ping An Life to maintain its industry lead in telemarketing in terms of market share.

The Ping An Property & Casualty Insurance Business underwent stable and healthy growth in the first three quarters in 2014, with a 25.8% year-on-year increase in premium income to RMB105,103 million. It maintained sound profitability, with a combined ratio of 94.9%. The corporate annuity business of Ping An Annuity continued to maintain healthy growth. The assets entrusted and assets under investment management totaled RMB179,217 million, enabling the Company to maintaining a market-leading position. As at September 30, 2014, the investment portfolio of insurance funds reached RMB1.37 trillion, up by 11.2% over the beginning of the year, with a steady rise in annualized net investment yield of our investment portfolio of insurance funds for the first three quarters of the year.
 
Significant rise in profitability of banking business; continuous improvement in risk management
 
Ping An Bank fully capitalized on the advantages of integrated finance and stepped up the reform of the operational and management model, raising profitability rapidly. Profitability surged with outstanding performance in various revenue and profit indicators. For the first three quarters of 2014, net profit was RMB15,694 million, up 34.2% year-on-year, while net non-interest income was RMB16,233 million, up 95.8% year-on-year. Net non-interest income as a percentage of revenue rose to 29.7%. Benefiting from the continuous adjustment and optimization of business structure over the past two years, operating efficiency rose significantly. Net interest spread and net interest margin increased by 0.29 percentage points and 0.30 percentage points, respectively, on a year-on-year basis.

As at the end of September, the Bank’s total assets reached RMB2.14 trillion, up by 13.4% over the beginning of the year. Deposit balance amounted to RMB1,508,179 million, up by 23.9% over the beginning of the year. The increase in deposit balance was 1.5 times that of the entire 2013, putting the Bank ahead of its industry peers with a growing market share. Loan balance amounted to RMB992,892 million, up by 17.2% over the beginning of the year.

On asset quality, Ping An Bank followed the principle of “risk management” and steadily strengthened its comprehensive risk management capability. For the first three quarters of 2014, the Bank recovered and disposed of non-performing assets totaling RMB2,145 million, maintaining relatively sound asset quality.
 
High net worth customer base for trust business exceeds 29 thousand; representing a more favorable business structure than that of peers

Ping An Trust’s private wealth management business grew steadily. As at September 30, the number of high net worth customers rose 33.6% over the beginning of the year to over 29 thousand. Assets held in trust reached RMB377,147 million, up by 29.9% over the beginning of the year. In particular, the percentage of collective trust was 72.5%, representing a more favorable business structure than that of its peers. Given the industry growth trends and current conditions, Ping An Trust continued to strengthen its comprehensive risk management system established in accordance with the requirements of Basel II, to ensure the risks associated with various businesses remained under control.

As at September 30, the financing trust scheme under collective trust amounted to RMB150,770 million. Of this amount, real estate financing amounted to RMB68,028 million and accounted for 45.1%. In the first three quarters of 2014, real estate collective trust schemes at maturity were redeemed on schedule. A total of RMB25.6 billion was cashed in, with another RMB11.5 billion to be cashed in the fourth quarter. Among existing real estate projects, medium to large-scale counterparties accounted for more than 90%; project distribution in first-tier and second-tier cities accounted for over two-thirds of the total; products with a remaining term of less than two years accounted for over 80% of the total. Risks associated with all existing projects remained under control with no potential risk of default.

Surge in user base and transaction volume of Internet Finance; Lufax’s transaction volume leads domestic P2P market

In the first three quarters of 2014, Ping An continued to strengthen its internet finance business by boosting the functions of products such as Lufax and Wanlitong Loyalty Points Program, and by improving user experience. With greater user participation, its internet finance platform saw a significant increase in transaction volume.

As at September 30, Lufax had a registered retail user base of over 3 million, growing continuously with more than 400 thousand new users registered each month. There were more than 1,000 institutional customers. In the first three quarters of 2014, Lufax’s transaction volume of financial assets surged nearly 5 times over the same period last year. Of this, P2P transaction volume surged nearly 5 times, placing it first in the domestic P2P market. The service platform of Wanlitong Loyalty Points Program developed rapidly. Wanlitong held a launch ceremony for the first alliance of loyalty points programs in August, initiating business cooperation with various renowned domestic and overseas companies. As at September 30, Wanlitong had 62.71 million registered users, up by 53% over the beginning of the year, and more than 500 thousand business partners. The transaction volume of Wanlitong loyalty points in the first three quarters grew260% year-on-year.
 
Ping An said: “China’s economic development will continue to accelerate at a moderate pace, in step with financial reforms. The overall situation will remain complex. The Company will endeavor to build Ping An into a “world-leading personal financial services provider” by closely monitoring changes in the external economic environment, continuously implementing the “Ping An Chariot” corporate governance and management model, promoting synergy throughout the Group’s subsidiaries, and constantly promoting the deep integration of modern science and technology with traditional finance.”