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Overview of Lufax's Financial Performance

Lufax Holding Ltd, a significant player in China's financial services sector, recently unveiled its financial results for the third quarter of 2026, marking a challenging period for the company. As a prominent enabler for small business owners across the nation, Lufax's financial health reflects broader economic shifts and challenges within its operational landscape.

Key Financial Highlights

In Q3 2026, Lufax reported a total income of RMB 6,180 million (approximately US$ 922 million), which indicates a decline from RMB 6,479 million in the same quarter of 2025. This decrease of 4.6% underscores the pressures facing the financial services firm amidst changing market conditions.

Moreover, Lufax experienced a substantial net loss of RMB 1,494 million (around US$ 223 million) for this quarter, a stark increase from a net loss of RMB 380 million in Q3 2025. The increase in losses was attributed to heightened credit impairment losses and additional taxation expenses, revealing the company's struggle to maintain profitability in the current environment.

Expense Breakdown

Total expenses also saw an uptick of 1.7%, reaching RMB 6,901 million (approximately US$ 1,029 million). Notably, credit impairment losses surged by 10.3%, reflecting escalating loan defaults that significantly impacted the financial results. Conversely, Lufax managed to curb costs in sales and marketing, reducing these expenditures by 13.7%.

Loan Performance Insights

On the operational front, Lufax noted a decrease of 11.9% in the total outstanding balance of loans it facilitated, which amounted to RMB 167.1 billion at the end of Q3 2026. However, there was a notable improvement in consumer finance, with the balance of such loans increasing by 19.8% year-over-year, indicating a shift towards consumer-focused lending strategies.

Strategic Adjustments

Faced with rising credit risks and deteriorating market conditions, Lufax's management, led by CEO Mr. Xiang Ji, emphasized its commitment to a more selective customer strategy. The company exited several high-risk customer segments and tailored its post-loan collection efforts, reflecting a cautious approach to financial sustainability.

Looking Forward

Despite these challenges, Lufax's retail credit enablement business showed resilience, with new consumer finance loan sales up by 25.2% on a year-over-year basis. The company is focused on quality growth, aiming to enhance shareholder value while navigating these tough market realities. It remains dedicated to prudent operational practices, seeking long-term viability in a highly competitive landscape.

In conclusion, while Lufax's recent quarterly results reveal significant setbacks, including increased losses and declining overall income, the company's strategic refocus on consumer finance and selective customer engagement demonstrates its intent to adapt and thrive amid ongoing challenges. Investors and stakeholders will be closely monitoring how these strategies unfold and their impact on future financial results.

Conference Call Announcement

Following the release of these financial results, Lufax's management plans to host an earnings conference call to discuss further details. Investors are encouraged to engage with the management to gain insights into the company’s strategic direction and operational adjustments moving forward.