NIM further improved in 2Q26, but fee income somewhat weak

Research evidence excerpt

Not for redistribution without written consent of Morgan Stanley

M

Update

August 16, 2026 07:36 AM GMT

Morgan Stanley Asia Limited+

Ping An Bank | Asia Pacific

Richard Xu, CFA

Equity Analyst

NIM further improved in 2Q26,

but fee income somewhat weak

Beryl Yang

Research Associate

Chiyao Huang

Equity Analyst

Chenqian Liu

AlphaSignals Earnings Reaction

Research Associate

Unchanged

In-line

Largely unchanged

Impact to our thesis

Financial results versus consensus

Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

Key Takeaways

NIM continued to improve sequentially, up 2bps qoq to 1.81% in 2Q26, supporting

Ping An Bank (000001.SZ, 000001 CS)

NII turning positive yoy growth, up 2.2% yoy.

China Financials | China

Net profit growth accelerated to 3.7% yoy in 2Q, supported by an improving costincome ratio, slightly lower credit cost and lower tax rate yoy.

Revenue modestly declined 0.9% yoy, dragged by non-interest income - both fee

income and investment income growth turned negative yoy.

Both the loan and deposit balance declined, by 0.4% and 1.3% qoq, respectively.

This was in respect of industry growth of 0.8% and 1.2% qoq, respectively.

NPL ratio was flat qoq/yoy at 1.05%, while both the SML ratio and overdue loan

ratio rose to 1.83% and 1.49%, respectively. NPL coverage was flat qoq at 219.6%.

NIM improvement continued despite some pressure on retail loan yield: NIM

rebounded 2bps qoq, despite 2bps lower asset yield (reflecting continued pressure

on retail loan yield, down 14bps qoq). This was supported by lower funding cost,

with 6bps lower deposit costs qoq.

Fee income weighed on revenue, mainly dragged down by: 1) 5.5% yoy decline in

settlement fees in 1H26; 2) 9.9% yoy decline in bank card fees in 1H26; and 3) slower

insurance sales (+0.6% yoy in 2Q26 vs +98.5% in 1Q26) and decline in WMPs sales,

despite strong wealth management fees (mainly supported by mutual fund sales).

Stock Rating

Industry View

Price target

Up/downside to price target (%)

Shr price, close (Aug 14, 2026)

52-Week Range

Sh out, dil, curr (mn)

Mkt cap, curr (mn)

EV, curr (mn)

Avg daily trading value (mn)

Overweight

Attractive

Rmb15.30

38

Rmb11.11

…