Lufax Holding Ltd – ADR (NYSE:LU) NII Increases 21.5%

Lufax Holding Ltd – ADR (NYSE:LU) stock rose 6.71% (As on November 24, 7:59:52 AM UTC-4, Source: Google Finance) though the company posted lower than expected results for the third quarter of FY 22. Cumulative number of borrowers increased by 15.3% to approximately 18.7 million as of September 30, 2022 from approximately 16.2 million as of September 30, 2021. During the third quarter of 2022, excluding the consumer finance subsidiary, 87.3% of new loans facilitated were disbursed to small business owners, up from 80.5% in the same period of 2021. For the third quarter of 2022, the Company’s retail credit facilitation revenue take rate based on loan balance was 7.8%, as compared to 9.7% for the third quarter of 2021. C-M3 flow rate for the total loans the Company had facilitated was 0.8% in the third quarter of 2022, as compared to 0.7% in the second quarter of 2022. Flow rates for the general unsecured loans and secured loans the Company had facilitated were 0.9% and 0.4%, respectively, in the third quarter of 2022, as compared to 0.8% and 0.3%, respectively, in the second quarter of 2022.

Moreover, total number of active investors grew to 15.5 million as of September 30, 2022 from 15.3 million as of September 30, 2021. Total client assets decreased by 2.0% to RMB416.8 billion as of September 30, 2022 from RMB425.1 billion as of September 30, 2021. Contribution to total client assets from customers with investments of more than RMB300,000 on the Company’s platform increased to 81.8% as of September 30, 2022 from 80.8% as of September 30, 2021.

LU in the third quarter of FY 22 has reported the adjusted earnings per share of 8 cents, missing the analysts’ estimates for the adjusted earnings per share of 15 cents, according to the Zacks Consensus Estimate. The company had reported 17.2 percent fall in the adjusted to $1.85 billion in the third quarter of FY 22, missing the analysts’ estimates for revenue by 11.45%. Technology platform-based income decreased by 30.3% to RMB6,672 million (US$938 million) in the third quarter of 2022 from RMB9,567 million in the same period of 2021 due to a decrease in new loan sales, client assets, and service fees. Net interest income increased by 21.5% to RMB4,618 million (US$649 million) in the third quarter of 2022 from RMB3,802 million in the same period of 2021. The Company had RMB45,803 million (US$6,439 million) in cash at bank as of September 30, 2022, as compared to RMB34,743 million as of December 31, 2021.

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