The nation's banking institutions have a chance to respond to the policy directives aimed at boosting China's consumer spending with loans and other retail credit solutions that can provide consumers with greater flexibility as the country recalibrates its economic growth model, according to senior executives of Ping An Bank.

The General Office of the Communist Party of China Central Committee and the General Office of the State Council, China's Cabinet, issued a special action plan on Sunday to shore up consumption. The move is part of the country's broader efforts to shift its economic development from an export and investment-led model toward a consumption-oriented model.

Financial institutions will be encouraged to increase the issuance of personal consumption loans, provided risks are controllable. They should reasonably set loan limits, terms and interest rates, according to the plan.

The plan reflects the urgent and critical need to stimulate consumer spending, said Ji Guangheng, president of Shenzhen, Guangdong province-based Ping An Bank.

"It is essential for us, as a retail-focused banking institution, to fully understand the policy directives and formulate plans that align with the policy," he said at the lender's annual results announcement in Shenzhen on Monday.

The bank generated approximately 146.7 billion yuan ($20.3 billion) in operating revenue in 2024, down by 10.9 percent year-on-year. Net profit dropped 4.2 percent on a yearly basis to 44.5 billion yuan.

Ji said the plan has stepped up support for trade-in programs for consumer goods, covering automobile, home appliance and electronic products, which is wider in scope and greater in intensity. This will "broaden the scenarios of retail credits" and "increase the flexibility" in the bank's product offerings, he said.

"We will adjust our loan limits, terms and risk tolerance to better meet the evolving needs of consumers," the executive said.

During the recently concluded two sessions, the annual meetings of the nation's top legislature and top political advisory body, boosting consumption was placed as the country's top priority.

Responding to questions as to how the downturn in the Chinese property market will affect the bank, Wu Leiming, president assistant and chief risk officer of Ping An Bank, said the risks associated with real estate remain "manageable" and the loss is "limited".

The overall market has stabilized, with property inventory gradually being cleared and corporate cash flow improving, he said, adding that new home sales in 2024 improved, while the first two months of this year have also seen stability.

However, Wu acknowledged that it may take some time for key indicators to return to a positive trajectory.

Yu Lingqu, deputy director of the Department of Financial Development and State-owned Assets and State-owned Enterprise Research at China Development Institute, a Shenzhen-based think tank, said the purpose of the action plan to boost consumption is to address the unsustainable issues arising from China's over-reliance on investment and exports.

On one hand, consumption growth will stimulate economic growth, leading to a better balance between consumption and investment. On the other, consumption upgrades will drive industrial upgrades, with fast development in service sectors such as elderly care, tourism and education, he said.

"In the future, the structure of financial services will also undergo significant changes to adapt to the rapid development of consumption and modern service industries. Consumer finance and elderly care finance are expected to become new growth drivers of financial institutions."