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BEIJING (AP) — Ping An Insurance Co. of China said Friday its first-half profit rose 9.4 percent on strong growth in its banking business but warned it faces "bigger challenges" as the Chinese economy slows.
Ping An, based in the southern city of Shenzhen, said it earned 13.9 billion yuan ($2.2 billion) in the first half, or 1.76 yuan (27.9 U.S. cents) per share, on revenue of 179 billion yuan ($28.4 billion).
The insurer said profit at its banking unit, created in an effort to transform Ping An into a financial conglomerate, nearly tripled to 6.7 billion yuan ($1.1 billion).
Ping An said its non-insurance units, including banking, securities and trust services, contributed 44 percent of profit, up from 27 percent a year earlier.
Chinese banks profited as lending rose rapidly following the country's quick rebound from the 2008 global crisis. But institutions have warned profits will be squeezed as China struggles to emerge from its deepest economic slump since the crisis.
Analysts also expect bank profits to be squeezed by a gradual government liberalization of interest rates that began this year. It will narrow the large guaranteed margin institutions previously enjoyed between rates charged to borrowers and those paid on deposits.
Government policy adjustments, a "lackluster external investment environment" and rising labor costs that will affect Ping An's borrowers "will pose bigger challenges to the company's performance in the second half of the year," the company said in a statement.