Lufax Holding (LU) Q3 2026 Earnings Report

The call presented meaningful operating strengths, including year-over-year loan-sales growth led by consumer finance, stable consumer finance NPLs, lower funding costs, sufficient funding for Lufax, better performance from newly originated 2026 loans, and continued investment in AI, collections, compliance, and customer management. However, these positives were outweighed by the RMB 1,494 million net loss, higher credit impairment losses, increased C-M3 flow rates, weak macroeconomic and consumer conditions, declining total loan balances and income, collection disruption, and stated near-term pressure on growth and profitability from regulatory changes.

Management expects asset quality will gradually improve as it deepens its selective customer strategy, although the macro and regulatory impact may continue for a couple of months towards the end of the year; it expects risk volatility caused by enforcement actions to be temporary, while noting that future recovery rates cannot be forecast at the moment and that collection measures will improve collection performance over time. Management said overall movement towards greater standardization will continue in the foreseeable future, with near-term pressure on growth and profitability, and will pursue more high-quality growth rather than a scale growth purely. Funding supply remains largely sufficient, major partner banks' willingness to lend and credit facility quotas remain stable, cost of funds by balance, excluding consumer finance declined to 3.6% in Q3, down 20 bps Q-on-Q and 80 bps year-on-year, and funding availability will not pose a material constraint on the lending business. Risk performance of loans newly originated in 2026 is within expectations and actually better than the previous one.