Lufax Holding (LU) Q4 2023 earnings summary

Executive summary

• Prioritized asset quality over loan growth amid difficult macro conditions; completed five de-risking and diversification initiatives and shifted to a 100% guarantee model.

• Q4 total income fell 44.3% YoY to RMB6,857 million and net loss widened to RMB832 million from RMB806 million; FY income declined 41.1% to RMB34,255 million.

Financial highlights

• Q4 total expenses decreased 38.5% YoY to RMB7,943 million; expenses excluding credit and asset impairment losses, finance costs and other gains/losses fell 33.2% to RMB4,389 million.

• FY total expenses declined 27.7% to RMB32,610 million from RMB45,102 million; FY net profit fell 88.2% to RMB1,034 million from RMB8,775 million.

• Q4 basic and diluted loss per ADS were both RMB1.48, versus RMB1.42 in Q4 2022.

Outlook and guidance

• FY2024 new loan sales forecast at RMB190 billion–RMB220 billion; year-end loan balance forecast at RMB200 billion–RMB230 billion, based on current preliminary market and operating views.

• Management reported flow-rate improvement in Q1 2024 after restructuring direct sales teams and branches, while maintaining a prudent, quality-first approach.