Lufax Holding (LU) investor relations material

Executive summary

• Total income declined 31% year-over-year to RMB 5.5 billion in Q3 2024, with a net loss of RMB 725 million versus a net profit a year ago.

• Loan demand from small business owners remained weak amid a challenging macro environment, but consumer finance business grew 27.8% year-over-year.

• Asset quality remained stable, with improved NPL ratio for consumer finance loans and steady C-M3 flow rate.

• Policy stimulus from the Chinese government in late September is expected to support long-term business improvement.

• Management remains prudent, prioritizing asset quality and focusing on non-SME/non-SBO segments and consumer finance.

Financial highlights

• Total income: RMB 5.5 billion, down from RMB 8.05 billion in Q3 2023.

• Net loss: RMB 725 million, compared to net profit of RMB 131 million in Q3 2023.

• Operating expenses declined 35.9% to RMB 3.0 billion; total expenses decreased 19% year-over-year to RMB 6.3 billion.

• Net interest income fell 18.8% to RMB 2.7 billion; technology platform income dropped 49.9% to RMB 1.6 billion.

• Cash at bank as of September 30, 2024: RMB 27.0 billion.

Outlook and guidance

• Loan volume guidance for 2024 remains RMB 190–220 billion; loan balance guidance RMB 200–230 billion.

• Profitability pressured in the short term due to upfront provisions under the 100% guarantee model, but lifetime profitability expected to improve.

• Management expects funding costs to continue decreasing as funding structure is optimized.

• Emphasis will shift toward non-SBO customers and further development of the consumer finance business.

• Management expects a cautious approach as small business owners take time to benefit from recent stimulus policies.