Chinese financial giant Ping An suffers a USD 2.7 billion setback in its asset management division
Ping An Suffers Net Loss in Asset Management Business Amid Market Volatility. In a significant turn of events, Ping An, one of China's largest financial conglomerates, reported a net loss of over USD 2.5 billion in its asset management business for 2023. This marks the first time the segment, which manages a total of RMB 7 trillion (USD 963.9 billion) in assets, has recorded a net loss since comparable data from 2016. The net loss was attributed to the impact of the macroeconomic environment and rising credit risks, as well as volatile capital markets in 2023. Rebecca Fu, senior vice president of Ping An, highlighted these factors during a recent press conference. Market volatility in Hong Kong and mainland Chinese stocks, as well as provisions made to 'certain projects,' resulted in the net loss in the asset management sector. Fu mentioned that Ping An Asset Management made provisions in the fourth quarter of 2023 to improve the quality of its balance sheet. The decline in Ping An's asset management business has had a cascading effect on the conglomerate as a whole. The net loss dragged down Ping An's overall net profit attributable to shareholders, which fell more than 22% to RMB 85.7 billion (USD 11.8 billion) in 2023 from RMB 111 billion (USD 15.2 billion) in 2022. Ping An's share prices also took a hit. On March 22, 2023, Hong Kong shares of Ping An fell as much as 6.7%, closing at HKD 33.5 (USD 4.2), down 5.8%. Shanghai-listed shares of Ping An closed 3.5% lower at RMB 40.56 (USD 5.6) for the day. The Hang Seng Index dropped more than 2% on March 22, 2023, while Shanghai's CSI 300 closed 1% lower for the day. Fu believes the stock price decline of Ping An is 'in a completely different direction from our fundamentals.' She emphasized that the group's total exposure to Country Garden, a real estate developer, is 'very small' following the sale of stakes in August 2022, reducing its holding to 4.99%. The stock price of Country Garden Holdings has dropped by more than 45% since the sale. When asked about provisions related to Country Garden, Fu stated it was not due to a single project. Fu also clarified that Ping An's asset management business includes trust, securities, financial leasing, and fund management. The article was first published on Nikkei Asia and is part of 36Kr's ongoing partnership with Nikkei.
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