Ping An Profit Rises, Along With Investment Returns

October 28, 2014
Ping An Insurance (Group) Co., China’s second-largest insurer, said profit rose in the third quarter as banking revenue expanded and a stock-market rally bolstered investment returns.

Net income climbed to 10.3 billion yuan ($1.68 billion), or 1.23 yuan a share, from 5.43 billion yuan, or 0.69 yuan a share, a year earlier, the company said in a statement to the Shanghai stock exchange.

The benchmark Shanghai Composite Index jumped 15 percent in the three months ended Sept. 30, boosting the value of Chinese insurers’ stock holdings. A 35 percent profit increase at unit Ping An Bank Co. also helped to lift the insurer’s profit.

Investment income rose 41 percent to 20 billion yuan, according to the statement. The company recorded 9 million yuan on fair value losses from investments, compared to a 79 million yuan fair value profit from investments a year ago, the Shenzhen-based insurer said.

Ping An recognized declines in the market value of some equity holdings, particularly bank shares, in the first half when the Shanghai Composite slid 3.2 percent, “relieving pressure in the second half and in the future by a lot,” Chief Financial Officer Jason Yao told reporters in Hong Kong in August.

The stock gauge has gained 10 percent this year as the government stepped up stimulus to contain a slide in economic growth.

Smaller rival New China Life Insurance Co. reported a 46 percent jump in third-quarter profit last week, as investment income surged 44 percent. Ping An rose 3.2 percent to HK$60.95 in Hong Kong, trimming this year’s loss to 12 percent.

The company’s board also approved stock incentive plans for core employees, according to a separate statement to the Shanghai stock exchange.

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