Lufax Holding Ltd (LU) Q3 2024 Earnings Call Highlights: Navigating Challenges with Strategic Growth

In This Article:

  • Total Income: Decreased by 31.1% to RMB5.5 billion from RMB8.1 billion.

  • Total Expenses: Decreased by 19.2% to RMB6.3 billion from RMB7.7 billion.

  • Operating Expenses: Declined by 35.9% to RMB3 billion from RMB4.7 billion.

  • Credit Impairment Losses: Increased by 9% to RMB3.3 billion from RMB3 billion.

  • Net Loss: Recorded a net loss of RMB725 million for the third quarter.

  • Loan Volume: Total new loan sales were RMB50.5 billion, improving by 11.7% from last quarter.

  • Consumer Finance Loans: Increased by 27.8% year over year, accounting for 52% of total new loan sales.

  • Loan Balance: Total loan balance stood at RMB213.1 billion, with consumer finance loans taking up 22%.

  • NPL Ratio: Decreased to 1.2% from 1.4% in the second quarter.

  • Take Rate: Increased to 9.7% from 7.8% year over year.

  • Technology Platform-Based Income: RMB1.6 billion, a decrease of 49.9%.

  • Net Interest Income: RMB2.7 billion, a decrease of 18.8% from the same period last year.

  • Guarantee Income: RMB818 million, a decrease of 13.1%.

  • Sales and Marketing Expenses: Decreased by 49.9% to RMB1.1 billion.

  • Operation and Servicing Expenses: Decreased by 25.8% to RMB1.1 billion.

  • Finance Costs: Increased by 48.9% to RMB59 million from RMB40 million.

  • Capital Adequacy Ratio: Consumer finance subsidiaries' ratio stood at 14.9%.

Release Date: October 22, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Lufax Holding Ltd (NYSE:LU) reported a 27.8% year-over-year increase in new consumer finance loans, which now account for 52% of total new loan sales.

  • The company's asset quality remained stable, with the C-M3 flow rate of Puhui loans at 0.9% and a decrease in the NPL ratio for consumer finance loans from 1.4% to 1.2%.

  • Lufax Holding Ltd (NYSE:LU) successfully acquired a nationwide small lending license, which has the potential to reduce funding costs and diversify the product portfolio.

  • The company reported a 1.9 percentage point increase in the balance take rate to 9.7% due to the 100% guarantee model.

  • Lufax Holding Ltd (NYSE:LU) is optimistic about the positive impact of Chinese government stimulus measures on its business performance in the long run.

Negative Points

  • Total income decreased by 31.1% to RMB5.5 billion, primarily due to a 41.8% decrease in outstanding loan balance.

  • The company recorded a net loss of RMB725 million for the third quarter.

  • Credit impairment losses increased by 9% to RMB3.3 billion, driven by increased provisions related to loans and certain investment assets.

  • Technology platform-based income decreased by 49.9%, affected by a decrease in retail credit services fees and the cessation of the Lujintong business.

  • The macroenvironment remains challenging, with a decline in the SME development index and business conditions index, impacting small business owners.

Waiting for permission
Allow microphone access to enable voice search

Try again.