Ping An-backed Chinese online lender Lufax reports 86 per cent drop in first-quarter profit, hints at small firms’ post-Covid struggles
- Challenging economic and operating environments impacted the industry and firm’s core small-business customers during the first quarter, CEO says
- Company extended 57 billion yuan (US$8.1 billion) in new loans in the first quarter, a 65 per cent decrease from a year earlier
Net income at the Shanghai-based company stood at 732 million yuan (US$103.8 million) in the first three months, compared with 5.29 billion yuan for the same period in 2022, Lufax said in a statement to the Hong Kong exchange on Tuesday. Revenue dropped 42 per cent to 10.1 billion yuan.
Lufax is China’s second-largest non-traditional financial services provider in terms of small-business loans, and Ping An owns about 41 per cent of the company through its subsidiaries An Ke Technology and Ping An Overseas Holdings.
“Challenging economic and operating environments continued to impact our industry and our core SBO (small business owner) customers during the first quarter,” YongSuk Cho, Lufax’s chairman and CEO, said in the statement.
The company’s disappointing result suggests that many of China’s smaller businesses are still grappling with the fallout of three years of relentless Covid-19 restrictions, and that the reopening of China’s economy has been uneven and bumpy, with the manufacturing industry lagging behind a macro recovery. China’s economy expanded 4.5 per cent in the first quarter, its fastest pace in a year, after Beijing removed all pandemic curbs in November.
