Lufax Reports First Quarter 2024 Financial Results
First Quarter 2024 Financial Highlights
- Total income was
RMB6,964 million (US$964 million ) in the first quarter of 2024, compared toRMB10,078 million in the same period of 2023. - Net loss was
RMB830 million (US$115 million ) in the first quarter of 2024, compared to net profit ofRMB732 million in the same period of 2023.
(In millions except percentages, unaudited) |
Three Months Ended |
|
|
|||
|
2023 |
|
2024 |
|
YoY |
|
|
RMB |
|
RMB |
USD |
|
|
Total income |
10,078 |
|
6,964 |
964 |
|
(30.9 %) |
Total expenses |
(8,964) |
|
(6,517) |
(903) |
|
(27.3 %) |
Total expenses excluding credit
impairment losses, finance costs and |
(5,685) |
|
(3,580) |
(496) |
|
(37.0 %) |
Credit impairment losses, finance costs |
(3,278) |
|
(2,936) |
(407) |
|
(10.4 %) |
Net profit/(loss) |
732 |
|
(830) |
(115) |
|
(213.3 %) |
|
|
|
|
|
|
|
First Quarter 2024 Operational Highlights
- Outstanding balance of loans enabled was
RMB270.2 billion as ofMarch 31, 2024 compared toRMB495.2 billion as ofMarch 31, 2023 , representing a decrease of 45.4%. - Cumulative number of borrowers increased by 12.4% to approximately 21.7 million as of
March 31, 2024 from approximately 19.4 million as ofMarch 31, 2023 . - New loans enabled were
RMB48.1 billion in the first quarter of 2024, compared toRMB57.0 billion in the same period of 2023, representing a decrease of 15.6%. - During the first quarter of 2024, excluding the consumer finance subsidiary, the Company bore risk on 100% of its new loans enabled, up from 22.6% in the same period of 2023.
- As of
March 31, 2024 , including the consumer finance subsidiary, the Company bore risk on 48.3% of its outstanding balance, up from 24.5% as ofMarch 31, 2023 . Credit enhancement partners bore risk on 50.1% of outstanding balance, among whichPing An Property & Casualty Insurance Company ofChina, Ltd. accounted for a majority. - As of
March 31, 2024 , excluding the consumer finance subsidiary, the Company bore risk on 41.6% of its outstanding balance, up from 20.4% as ofMarch 31, 2023 . - For the first quarter of 2024, the Company's retail credit enablement business take rate[1] based on loan balance was 9.0%, as compared to 7.3% for the first quarter of 2023.
- C-M3 flow rate[2] for the total loans the Company had enabled, excluding the consumer finance subsidiary, was 1.0% in the first quarter of 2024, compared to 1.2% in the fourth quarter of 2023. Flow rates for the general unsecured loans and secured loans the Company had enabled were 1.0% and 0.7% respectively in the first quarter of 2024, as compared to 1.4% and 0.8% respectively in the fourth quarter of 2023.
- Days past due ("DPD") 30+ delinquency rate[3] for the total loans the Company had enabled, excluding the consumer finance subsidiary, was 6.6% as of
March 31, 2024 , as compared to 6.9% as ofDecember 31, 2023 . DPD 30+ delinquency rate for general unsecured loans was 7.4% as ofMarch 31, 2024 , as compared to 7.7% as ofDecember 31, 2023 . DPD 30+ delinquency rate for secured loans was 4.5% as ofMarch 31, 2024 , as compared to 4.4% as ofDecember 31, 2023 . - DPD 90+ delinquency rate[4] for total loans enabled, excluding the consumer finance subsidiary, was 4.4% as of
March 31, 2024 , as compared to 4.1% as ofDecember 31, 2023 . DPD 90+ delinquency rate for general unsecured loans was 5.0% as ofMarch 31, 2024 , as compared to 4.6% as ofDecember 31, 2023 . DPD 90+ delinquency rate for secured loans was 2.6% as ofMarch 31, 2024 , as compared to 2.6% as ofDecember 31, 2023 . - As of
March 31, 2024 , the non-performing loan (NPL) ratio[5] for consumer finance loans was 1.6% as compared to 1.5% as ofDecember 31, 2023 .
Mr. YongSuk Cho, Chairman and Chief Executive Officer of
Mr.
Mr.
[1] The take rate of retail credit enablement business is calculated by dividing the aggregated amount of loan enablement service fees, post-origination service fees, net interest income, guarantee income and the penalty fees and account management fees by the average outstanding balance of loans enabled for each period. [2] C-M3 flow rate estimates the percentage of current loans that will become non-performing at the end of three months, and is defined as the product of (i) the loan balance that is overdue from 1 to 29 days as a percentage of the total current loan balance of the previous month, (ii) the loan balance that is overdue from 30 to 59 days as a percentage of the loan balance that was overdue from 1 to 29 days in the previous month, and (iii) the loan balance that is overdue from 60 to 89 days as a percentage of the loan balance that was overdue from 30 days to 59 days in the previous month. Loans from legacy products and consumer finance subsidiary are excluded from the flow rate calculation. [3] DPD 30+ delinquency rate refers to the outstanding balance of loans for which any payment is 30 to 179 calendar days past due divided by the outstanding balance of loans. Loans from legacy products and consumer finance subsidiary are excluded from the calculation. [4] DPD 90+ delinquency rate refers to the outstanding balance of loans for which any payment is 90 to 179 calendar days past due divided by the outstanding balance of loans. Loans from legacy products and consumer finance subsidiary are excluded from the calculation. [5] Non-performing loan ratio for consumer finance loans is calculated by using the outstanding balance of consumer finance loans for which any payment is 91 or more calendar days past due and not written off, and certain restructured loans, divided by the outstanding balance of consumer finance loans. |
First Quarter 2024 Financial Results
TOTAL INCOME
Total income was
|
Three Months Ended |
|
|
||||
(In millions except percentages, |
2023 |
|
2024 |
|
YoY |
||
|
RMB |
% of income |
|
RMB |
% of income |
|
|
Technology platform-based income |
5,010 |
49.7 % |
|
2,553 |
36.7 % |
|
(49.0 %) |
Net interest income |
3,349 |
33.2 % |
|
2,845 |
40.9 % |
|
(15.0 %) |
Guarantee income |
1,417 |
14.1 % |
|
925 |
13.3 % |
|
(34.7 %) |
Other income |
227 |
2.3 % |
|
319 |
4.6 % |
|
40.3 % |
Investment income |
75 |
0.7 % |
|
322 |
4.6 % |
|
329.2 % |
Share of net profits of investments |
(0) |
(0.0 %) |
|
(1) |
(0.0 %) |
|
(58.5 %) |
Total income |
10,078 |
100.0 % |
|
6,964 |
100.0 % |
|
(30.9 %) |
-
Technology platform-based income
was
RMB2,553 million (US$354 million ) in the first quarter of 2024, compared toRMB5,010 million in the same period of 2023, representing a decrease of 49.0%, due to 1) the decrease of retail credit service fees due to the decrease in new loan sales and loan balance and 2) the decrease of referral and other technology platform-based income due to the decrease in transaction volume. -
Net interest income
was
RMB2,845 million (US$394 million ) in the first quarter of 2024, compared toRMB3,349 million in the same period of 2023, representing a decrease of 15.0%, mainly due to the decrease in loan balance, partially offset by the increase of net interest income from the Company's consumer finance business. -
Guarantee income
was
RMB925 million (US$128 million ) in the first quarter of 2024, compared toRMB1,417 million in the same period of 2023, representing a decrease of 34.7%, primarily due to the decrease in loan balance and a lower average fee rate. -
Other income
was
RMB319 million (US$44 million ) in the first quarter of 2024, compared to other income ofRMB227 million in the same period of 2023. The increase was mainly due to the increased account management fees driven by improved collection performance. -
Investment income
was
RMB322 million (US$45 million ) in the first quarter of 2024, compared to RMB75 million in the same period of 2023, mainly due to the decrease of losses associated with certain risk assets, offset by the increase of income from investment assets.
TOTAL EXPENSES
Total expenses decreased by 27% to
|
Three Months Ended |
|
|
||||
(In millions except percentages, unaudited) |
2023 |
|
2024 |
|
YoY |
||
|
RMB |
% of income |
|
RMB |
% of income |
|
|
Sales and marketing expenses |
3,030 |
30.1 % |
|
1,518 |
21.8 % |
|
(49.9 %) |
General and administrative expenses |
756 |
7.5 % |
|
483 |
6.9 % |
|
(36.2 %) |
Operation and servicing expenses |
1,558 |
15.5 % |
|
1,327 |
19.1 % |
|
(14.8 %) |
Technology and analytics expenses |
341 |
3.4 % |
|
252 |
3.6 % |
|
(26.1 %) |
Credit impairment losses |
3,132 |
31.1 % |
|
2,861 |
41.1 % |
|
(8.6 %) |
Finance costs |
189 |
1.9 % |
|
58 |
0.8 % |
|
(69.2 %) |
Other (gains)/losses - net |
(42) |
(0.4 %) |
|
17 |
0.2 % |
|
(138.9 %) |
Total expenses |
8,964 |
88.9 % |
|
6,517 |
93.6 % |
|
(27.3 %) |
-
Sales and marketing expenses
decreased by 49.9% to
RMB1,518 million (US$210 million ) in the first quarter of 2024 fromRMB3,030 million in the same period of 2023. The decrease was mainly due to 1) the decreased loan-related expenses as a result of the decrease in loan balance and 2) decreased retention expenses and referral expenses from platform service attributable to the decreased transaction volume. -
General and administrative expenses
decreased by 36.2% to
RMB483 million (US$67 million ) in the first quarter of 2024 from RMB756 million in the same period of 2023, mainly due to the Company's expense control measures and the decrease in taxes and surcharges. -
Operation and servicing expenses
decreased by 14.8% to
RMB1,327 million (US$184 million ) in the first quarter of 2024 fromRMB1,558 million in the same period of 2023, due to the Company's expense control measures and decrease of loan balance, partially offset by increased commission associated with improved collection performance. -
Technology and analytics expenses
decreased by 26.1% to
RMB252 million (US$35 million ) in the first quarter of 2024 fromRMB341 million in the same period of 2023, primarily due to the Company's improved efficiency and expense control measures. -
Credit impairment losses
decreased by 8.6% to
RMB2,861 million (US$396 million ) in the first quarter of 2024 fromRMB3,132 million in the same period of 2023, mainly due to the decrease in provision of loans and receivables as a result of the improvement of credit performance. -
Finance costs
decreased by 69.2% to
RMB58 million (US$8 million ) in the first quarter of 2024 fromRMB189 million in the same period of 2023, mainly due to the decrease of interest expenses as a result of repayment of C-Round Convertible Promissory Notes and other debts, partially offset by the decrease of interest income from bank deposits. -
Other losses
were
RMB17 million (US$2 million ) in the first quarter of 2024, compared to other gains ofRMB42 million in the same period of 2023, mainly due to the increase of foreign exchange losses.
NET LOSS
Net loss was
LOSS PER ADS
Basic and diluted loss per American Depositary Share ("ADS") were both
BALANCE SHEET
The Company had
Change in Management Team
Mr.
Conference Call Information
The Company's management will hold an earnings conference call at
Registration Link: https://dpregister.com/sreg/10188298/fc485dda60
A live and archived webcast of the conference call will also be available at the Company's investor relations website at https://ir.lufaxholding.com.
The replay will be accessible through
United States: 1-877-344-7529
International: 1-412-317-0088
Conference ID: 2835954
About
Exchange Rate Information
This announcement contains translations of certain RMB amounts into
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Statements that are not historical facts, including statements about Lufax' s beliefs and expectations, are forward-looking statements.
Investor Relations Contact
Email: Investor_Relations@lu.com
Tel: +1 (646) 308-0546
Email: lufax.ir@icrinc.com
UNAUDITED INTERIM CONDENSED CONSOLIDATED INCOME STATEMENTS (All amounts in thousands, except share data, or otherwise noted) |
|||||||
|
|||||||
|
Three Months Ended |
||||||
|
2023 |
|
|
2024 |
|||
|
RMB |
|
|
RMB |
|
|
USD |
Technology platform-based income |
5,010,373 |
|
|
2,553,075 |
|
|
353,597 |
Net interest income |
3,348,630 |
|
|
2,845,191 |
|
|
394,054 |
Guarantee income |
1,416,759 |
|
|
925,248 |
|
|
128,145 |
Other income |
227,462 |
|
|
319,183 |
|
|
44,206 |
Investment income |
74,964 |
|
|
321,758 |
|
|
44,563 |
Share of net profits of investments accounted for using the |
(436) |
|
|
(691) |
|
|
(96) |
Total income |
10,077,752 |
|
|
6,963,764 |
|
|
964,470 |
Sales and marketing expenses |
(3,030,053) |
|
|
(1,518,096) |
|
|
(210,254) |
General and administrative expenses |
(756,071) |
|
|
(482,504) |
|
|
(66,826) |
Operation and servicing expenses |
(1,557,889) |
|
|
(1,327,421) |
|
|
(183,846) |
Technology and analytics expenses |
(341,485) |
|
|
(252,338) |
|
|
(34,948) |
Credit impairment losses |
(3,131,800) |
|
|
(2,861,484) |
|
|
(396,311) |
Finance costs |
(188,639) |
|
|
(58,156) |
|
|
(8,055) |
Other gains/(losses) - net |
42,412 |
|
|
(16,502) |
|
|
(2,286) |
Total expenses |
(8,963,525) |
|
|
(6,516,501) |
|
|
(902,525) |
Profit before income tax expenses |
1,114,227 |
|
|
447,263 |
|
|
61,945 |
Income tax expenses |
(381,857) |
|
|
(1,277,224) |
|
|
(176,893) |
Net profit/(loss) for the period |
732,370 |
|
|
(829,961) |
|
|
(114,948) |
|
|
|
|
|
|
|
|
Net profit/(loss) attributable to: |
|
|
|
|
|
|
|
Owners of the Group |
671,976 |
|
|
(870,463) |
|
|
(120,558) |
Non-controlling interests |
60,394 |
|
|
40,502 |
|
|
5,609 |
Net profit/(loss) for the period |
732,370 |
|
|
(829,961) |
|
|
(114,948) |
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
-Basic earnings/(loss) per share |
0.59 |
|
|
(0.76) |
|
|
(0.11) |
-Diluted earnings/(loss) per share |
0.59 |
|
|
(0.76) |
|
|
(0.11) |
-Basic earnings/(loss) per ADS |
1.18 |
|
|
(1.52) |
|
|
(0.21) |
-Diluted earnings/(loss) per ADS |
1.18 |
|
|
(1.52) |
|
|
(0.21) |
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (All amounts in thousands, except share data, or otherwise noted) |
|||||
|
|||||
|
As of |
|
As of |
||
|
2023 |
|
2024 |
||
|
RMB |
|
RMB |
|
USD |
Assets |
|
|
|
|
|
Cash at bank |
39,598,785 |
|
39,442,267 |
|
5,462,691 |
Restricted cash |
11,145,838 |
|
14,662,440 |
|
2,030,724 |
Financial assets at fair value through profit or loss |
28,892,604 |
|
32,848,689 |
|
4,549,491 |
Financial assets at amortized cost |
3,011,570 |
|
2,937,778 |
|
406,878 |
Accounts and other receivables and contract assets |
7,293,671 |
|
6,288,652 |
|
870,968 |
Loans to customers |
129,693,954 |
|
116,572,471 |
|
16,145,101 |
Deferred tax assets |
5,572,042 |
|
5,584,639 |
|
773,464 |
Property and equipment |
180,310 |
|
174,039 |
|
24,104 |
Investments accounted for using the equity method |
2,609 |
|
- |
|
- |
Intangible assets |
874,919 |
|
877,961 |
|
121,596 |
Right-of-use assets |
400,900 |
|
376,663 |
|
52,167 |
|
8,911,445 |
|
8,911,445 |
|
1,234,221 |
Other assets |
1,444,362 |
|
1,228,805 |
|
170,188 |
Total assets |
237,023,009 |
|
229,905,849 |
|
31,841,592 |
Liabilities |
|
|
|
|
|
Payable to platform users |
985,761 |
|
832,667 |
|
115,323 |
Borrowings |
38,823,284 |
|
42,114,863 |
|
5,832,841 |
Current income tax liabilities |
782,096 |
|
752,420 |
|
104,209 |
Accounts and other payables and contract liabilities |
6,977,118 |
|
5,835,253 |
|
808,173 |
Payable to investors of consolidated structured entities |
83,264,738 |
|
75,562,879 |
|
10,465,338 |
Financing guarantee liabilities |
4,185,532 |
|
3,690,790 |
|
511,169 |
Deferred tax liabilities |
524,064 |
|
552,654 |
|
76,542 |
Lease liabilities |
386,694 |
|
361,467 |
|
50,063 |
Convertible promissory note payable |
5,650,268 |
|
5,752,392 |
|
796,697 |
Other liabilities |
1,759,672 |
|
1,625,282 |
|
225,099 |
Total liabilities |
143,339,227 |
|
137,080,667 |
|
18,985,453 |
Equity |
|
|
|
|
|
Share capital |
75 |
|
75 |
|
10 |
Share premium |
32,142,233 |
|
32,153,525 |
|
4,453,212 |
|
(5,642,768) |
|
(5,642,768) |
|
(781,514) |
Other reserves |
155,849 |
|
116,026 |
|
16,069 |
Retained earnings |
65,487,099 |
|
64,616,636 |
|
8,949,301 |
Total equity attributable to owners of the Company |
92,142,488 |
|
91,243,494 |
|
12,637,078 |
Non-controlling interests |
1,541,294 |
|
1,581,688 |
|
219,061 |
Total equity |
93,683,782 |
|
92,825,182 |
|
12,856,139 |
Total liabilities and equity |
237,023,009 |
|
229,905,849 |
|
31,841,592 |
|
|
|
|
|
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (All amounts in thousands, except share data, or otherwise noted) |
|||||
|
|||||
|
Three Months Ended |
||||
|
2023 |
|
2024 |
||
|
RMB |
|
RMB |
|
USD |
Net cash generated from/(used in) operating activities |
3,286,049 |
|
502,532 |
|
69,600 |
Net cas h generated from/(used in) investing activities |
2,174,740 |
|
2,747,041 |
|
380,461 |
Net cash generated from/(used in) financing activities |
(2,777,226) |
|
499,183 |
|
69,136 |
Effects of exchange rate changes on cash and cash equivalents |
33,680 |
|
6,701 |
|
928 |
Net increase/(decrease) in cash and cash equivalents |
2,717,243 |
|
3,755,457 |
|
520,125 |
Cash and cash equivalents at the beginning of the period |
29,537,511 |
|
18,480,096 |
|
2,559,464 |
Cash and cash equivalents at the end of the period |
32,254,754 |
|
22,235,553 |
|
3,079,589 |
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