Ping An Insurance (Group) said last night its third-quarter net profit was lifted by meaningful top-line growth in its banking operations after it merged with Shenzhen Development Bank in April. The country's second-largest insurer by premiums after China Life Insurance said in a statement the "banking business showed stable growth with smooth integration", underpinned by a robust expansion in its credit card business and the personal wealth management segment. An analyst at CLSA Asia-Pacific Markets told the South China Morning Post : "Despite the lacklustre performance in life and non-life business, Ping An is able to weather the fierce competition in China's insurance market by expanding its footprint into the banking industry, which could widen its sales channel, and compete directly with the big domestic lenders which sell insurance policies in their local branches." Net profit rose 20.7 per cent to 2.13 billion yuan (HK$2.64 billion) for the three months to September from a year earlier, driven by revenues from the newly merged banking unit that advanced more than 22 per cent to 19 billion yuan. Net earned premiums rose 19 per cent, which fell short of the market expectation of an average 30 per cent, according to 10 analysts surveyed by the Post . Investment income dropped 3 per cent to 19.2 billion yuan in the first nine months because of the persistently sluggish domestic stock markets. On a brighter note, Francis Chan, an analyst with ABC International, said the slow premium growth environment might improve as the nation's medicare plans would lift health insurance sales, exceeding normal growth in life insurance premiums. Chan forecast double-digit growth for next year, outperforming the overall insurance market. General administrative expenses, such as wages, soared 40 per cent to 47.3 billion yuan in the first nine months from a year earlier, and expenses with regard to the policyholders' benefits grew 13 per cent to 128 billion yuan. Overall expenses rose 31 per cent to nearly 230 billion yuan, reflecting increasing pressure on profitability in the midst of slowing economic growth and wage inflation. Ping An's chief rival, China Life, posted last week its first quarterly loss since 2008 as it suffered from declining investment yields and higher impairment losses resulting from softness in the domestic capital markets. In terms of valuations, Ping An appears a bargain, trading at a value of new business multiple of 5.7 times this year, compared with 9.3 times at China Life and 15 times at AIA Group, according to CCB International's estimate.