Oct 27, 2026 earnings call — Resumed Hong Kong trading; reported Q3 net loss
Net loss of RMB 1,494 million for Q3 2026, within the previously announced range.
Revenue $0.9B (est $2.2B) · EPS $-0.27 (est $10.81)
Key quotes
"We will continue to closely monitor regulatory development and reinforce compliance controls across the collection process, including enhanced compliance training to ensure that all collection activities remain within the applicable legal and regulatory framework."
"Consumer finance continued to lead our growth with new loan sales up 25.2% year-over-year to RMB 39.7 billion, representing 68.1% of total new loan sales."
"Credit impairment losses increased 10.3% to RMB 4,511 million, reflecting higher actual losses and provision of loans and receivables."
Analyst Q&A 5
credit losses cause
Q (Richard Xu · MS): The analyst said he had two questions and began by asking about observed credit losses and their drivers.
A: No management answer appears in this exchange. The analyst's question was recorded but not answered here.
audio check
Q (Richard Xu · MS): The analyst checked whether the line was muted and asked if the conference could hear him.
A: No management answer appears in this exchange. This exchange only shows the analyst checking connection.
loan originations and collections
Q (Yujie Jing · China International Capital): The analyst asked (1) the trend in loan originations and asset quality after the digital technology incident and when they will stabilize, and (2) how collections are performing and whether future recovery rates will be affected.
A: Q3 new loan sales were around RMB 58 billion, up 2.5% year-on-year and 14% quarter-on-quarter, with consumer finance about RMB 40 billion or 58% of total. Asset quality showed a stable consumer finance NPL ratio but a C-M3 flow rate rise to 1.2% from 1.0% quarter-on-quarter; collection was hurt in Q3 by tighter industry liquidity and enforcement actions, but in-house collection, judicial recovery, model-based targeting and AI tools should improve recovery over a couple of months.
"Q3 new loan sales reached around RMB 58 billion, up 2.5% year-on-year and 14% quarter-on-quarter." — Xiang Ji (CEO)
credit losses and regulation
Q (Richard Xu · MS): The analyst asked what drove the wider credit losses in Q3 and whether those drivers are one-off or persistent, and asked about expected regulatory changes and potential impacts on Lufax's business model.
A: The operating loss was driven by increased credit impairment losses from a weak macro environment for small and micro businesses and tightened regulatory oversight, especially enforcement on the collections industry, plus extra tax expenses from reduced deferred tax assets. Management said they expect the enforcement-driven risk volatility to be temporary, that tighter standardization and oversight will continue, and that Lufax is shifting to higher-quality growth and transforming its model to be compliant over the long term.
"Going forward, we expect risk volatility caused by enforcement actions to be temporary, right?" — Xiang Ji (CEO)
funding supply and asset quality
Q (Huatai): The analyst asked (1) whether funding supply from partner banks remains sufficient, whether quotas or funding costs changed, and how funding affected Q3 originations and forward outlook, and (2) whether Q3 asset quality deterioration was driven by legacy loans or new loans and when it will stabilize.
A: Funding supply to the industry is under pressure, but for Lufax funding remains largely sufficient with partner banks' willingness and quotas stable and funding costs declining; cost of funds excluding consumer finance was 3.6% in Q3, down 20 bps Q-on-Q and 80 bps year-on-year. The Q3 increase in credit impairment losses was mainly from actual losses on certain existing loan assets; loans originated in 2026 performed within expectations and better than before, and management expects enforcement-driven volatility to be temporary while using selective customer strategies and AI risk models.
"As far as Lufax is concerned, funding supply remains largely sufficient." — Xiang Ji (CEO)