Financial Performance - Total revenue decreased from RMB 58.116 billion for the year ended December 31, 2022, to RMB 34.255 billion for the year ended December 31, 2023[7]. - Net profit fell from RMB 8.775 billion for the year ended December 31, 2022, to RMB 1.034 billion for the year ended December 31, 2023, resulting in a net profit margin of 3%[7]. - Total expenses decreased by 27.7% from RMB 45,102 million in 2022 to RMB 32,610 million in 2023, attributed to operational expense optimization and reduced loan sales[72]. - Net profit dropped by 88.2% from RMB 8,800 million in 2022 to RMB 1,000 million in 2023, influenced by various factors including reduced revenue[76]. - Cash and cash equivalents decreased from RMB 43,882 million in 2022 to RMB 39,599 million in 2023[77]. - Operating cash flow for 2023 was RMB 15,030 million, significantly higher than RMB 4,455 million in 2022[78]. Loan Issuance and Balances - As of December 31, 2023, Lufax's loan balance was RMB 315.4 billion, a decrease of 45.3% compared to December 31, 2022[7]. - The total new loan issuance for the year ended December 31, 2023, was RMB 208 billion, down from RMB 495.4 billion for the year ended December 31, 2022[7]. - The new loan issuance for consumer finance in the year ended December 31, 2023, was RMB 71.2 billion, with a non-performing loan ratio of 1.5%[7]. - Lufax aims for new loan sales in 2024 to be between RMB 190 billion and RMB 220 billion, with year-end loan balances projected between RMB 200 billion and RMB 230 billion[8]. - The total new loan volume for consumer finance loans in 2023 was RMB 71.2 billion, accounting for 34.2% of the total[25]. Risk Management - The company has implemented five major risk mitigation and diversification measures to adapt to the challenging macroeconomic environment affecting small and micro enterprises[8]. - The company has gradually reduced reliance on third-party credit enhancement providers, focusing on internal credit ratings for borrowers[9]. - The non-performing loan ratio for consumer finance loans as of December 31, 2023, was 1.5%, unchanged from the previous year[36]. - The company employs a dynamic risk rating system for borrowers, categorizing them from R1 (lowest risk) to R6 (highest risk), focusing on higher-rated borrowers[55]. - The company’s risk pricing model considers the borrower's risk rating, debt-to-income ratio, and asset value to determine appropriate risk pricing[50]. Operational Changes - The company completed a business transformation to a 100% guarantee model in Q4 2023, eliminating the need for third-party credit enhancement for new loan transactions[9]. - The company has established partnerships with 85 financial institutions, many of which have been partners for over three years[7]. - The company has successfully transitioned to a 100% guaranteed business model for new loan transactions as of Q4 2023[83]. - The company has established agreements with funding partners to regulate financing arrangements and financial guarantees under the 100% guarantee business model[41]. Employee and Operational Metrics - The company employed over 1,500 staff for targeted telemarketing and online sales activities as of December 31, 2023[20]. - The average monthly contribution of new loans per employee in the telemarketing and online sales channel was RMB 78,200 (approximately USD 11,000) in 2023[20]. - The company employed a total of 36,215 employees as of December 31, 2023, with a total employee benefit expense of RMB 12,529 million for the year[88]. - The sales and marketing department accounted for the largest share of employees, with 24,665 staff members[89]. Governance and Compliance - The company has adopted the Corporate Governance Code as a benchmark for its governance practices since its listing date until December 31, 2023[91]. - The board consists of a balanced mix of executive and non-executive directors, ensuring strong independence and effective decision-making[93]. - The company has maintained at least three independent non-executive directors, meeting the listing rules requirements[99]. - The board is responsible for overseeing the company's operations and financial performance, ensuring robust internal controls and risk management[97]. - The company has implemented a code to regulate all securities transactions by directors and relevant employees, confirming compliance since the listing date[92]. Shareholder Information - The company has 1,146,319,171 shares issued and outstanding as of December 31, 2023, excluding treasury shares[147]. - The company declared an interim dividend of $0.078 per share or $0.039 per American Depositary Share for the six months ended June 30, 2023[154]. - The company has received a waiver from the Stock Exchange to retain treasury shares, subject to specific conditions regarding future share repurchases and issuance[147]. - The company has a robust internal control assessment process conducted regularly by all departments to identify potential risks[119]. Future Outlook and Challenges - The company faces significant risks, including increased credit risk exposure and potential regulatory changes that could adversely affect its business operations and financial performance[140]. - The company reported that its business model updates may not succeed, which could impact future performance[140]. - The company’s ability to obtain sufficient and sustainable funding at commercially attractive costs is uncertain[140]. - The company’s financial performance may be significantly affected by severe or prolonged economic downturns in China or globally[140].

Financial Data and Key Metrics Changes - In Q1 2024, total new loan sales decreased by 15.6% year-on-year to RMB48.1 billion, primarily due to weak demand from small business owners (SBOs) and a focus on prudent operations [8][14] - Revenue for Q1 2024 was RMB7 billion, a decrease of 30.9% year-over-year, attributed to lower new loan sales and outstanding loan balances, partially offset by an increased take rate [14][23] - The net loss for Q1 2024 was RMB830 million, compared to a net profit of RMB732 million in the same quarter of 2023, mainly due to increased tax associated with the special dividend [14][26] Business Line Data and Key Metrics Changes - New loan sales in the consumer finance business grew to RMB20.3 billion in Q1 2024, representing a 46% year-over-year increase, while new loan sales from the Puhui business decreased by 35.5% year-over-year [8][14] - The consumer finance segment accounted for 42% of total new loan sales in Q1 2024, up from approximately 24% in the same period last year [14][16] Market Data and Key Metrics Changes - The Purchasing Managers' Index (PMI) for manufacturing increased from 49 in December 2023 to 50.8 in March 2024, while the services PMI rose from 49.3 to 52 [6] - The SME development index was 89.3 for Q1 2024, showing minimal improvement from 89.1 in Q4 2023 and 89.3 in Q1 2023, indicating a slow recovery in the SBO segment [7] Company Strategy and Development Direction - The company completed five major de-risking and diversification actions, which have started to yield improvements in asset quality, although operational prudence remains critical for long-term growth [8][12] - The acquisition of Ping An OneConnect Bank was completed in early April 2024, aimed at leveraging strong licenses to expand service offerings and diversify the business [11] Management's Comments on Operating Environment and Future Outlook - Management noted improvements in early risk indicators but emphasized the continued weakness in high-quality loan demand from SBOs, maintaining a focus on quality over quantity [6][12] - The company remains cautious about the sustainability of asset quality improvements and will continue to prioritize prudent operations [10][32] Other Important Information - A special dividend of USD 2.42 per ADS or USD 1.21 per ordinary share was announced, subject to shareholder approval at the AGM on May 30, 2024 [11] - The CFO, David Choy, will resign effective April 30, 2024, and Zhu Peiqing has been appointed as the new CFO [12] Q&A Session Summary Question: Update on special dividend progress and future shareholder returns - Management confirmed that the special dividend is subject to shareholder approval at the AGM and the long-term dividend policy remains unchanged at 20% to 40% of annual net profit [30][31] Question: Sustainability of asset quality improvement - Management acknowledged the improvement in asset quality but remains cautious about its sustainability, attributing improvements to de-risking efforts and a better quality portfolio [30][32] Question: Loan growth outlook for the rest of the year - Management indicated that while there has been early improvement, demand for high-quality loans remains subdued, and they will proceed with caution regarding loan volume expansion [34][35] Question: Unit economics and transition to 100% guarantee model - Management discussed the expected evolution of unit economics, noting that while new loans under the 100% guarantee model may incur initial losses, they are projected to be lifetime profitable [36][37] Question: Risk-bearing percentage outlook - Management stated that the risk-bearing percentage is expected to gradually increase as the new model is fully implemented, with 48.3% of total loan balance currently under the 100% guarantee model [40][41]

Financial Performance - For Q1 2024, total revenue was RMB 6,964 million (approximately USD 964 million), a decrease of 30.9% compared to RMB 10,078 million in Q1 2023[8] - The net loss for Q1 2024 was RMB 830 million (approximately USD 115 million), compared to a net profit of RMB 732 million in Q1 2023, representing a significant increase in losses of 213.3%[8] - Total expenses for Q1 2024 were RMB 6,517 million, down 27.3% from RMB 8,964 million in Q1 2023[9] - The company reported a significant reduction in total expenses excluding credit impairment losses and financing costs, which decreased by 37.0% to RMB 3,580 million[9] - Total revenue for the three months ended March 31, 2024, was RMB 6,963,764 thousand, a decrease from RMB 10,077,752 thousand for the same period in 2023, representing a decline of approximately 30.9%[30] - The net profit for the three months ended March 31, 2024, was a loss of RMB 829,961 thousand, compared to a net profit of RMB 732,370 thousand for the same period in 2023[30] - The company reported a basic and diluted loss per share of RMB 0.76 for the three months ended March 31, 2024, compared to earnings of RMB 0.59 for the same period in 2023[30] Cash and Liquidity - As of March 31, 2024, the company's bank deposits were RMB 39,442 million (approximately USD 5,463 million), a slight decrease from RMB 39,599 million as of December 31, 2023[23] - The company’s cash and cash equivalents, including restricted cash, totaled RMB 54,104,707 thousand as of March 31, 2024, compared to RMB 50,744,623 thousand as of December 31, 2023, showing an increase of approximately 6.9%[31] - Cash and cash equivalents at the end of March 31, 2024, totaled RMB 22,235,553 thousand, down from RMB 32,254,754 thousand at the end of the previous year[34] - The company’s cash and cash equivalents increased by RMB 3,755,457 thousand during the three months ended March 31, 2024, compared to an increase of RMB 2,717,243 thousand in the same period of the previous year[34] - The impact of foreign exchange rate changes on cash and cash equivalents was RMB 6,701 thousand for the three months ended March 31, 2024[34] Loan and Borrower Metrics - As of March 31, 2024, the enabled loan balance was RMB 270.2 billion, a decrease of 45.4% from RMB 495.2 billion as of March 31, 2023[9] - In Q1 2024, the newly enabled loans amounted to RMB 48.1 billion, a decrease of 15.6% compared to RMB 57.0 billion in the same period of 2023[10] - The risk-bearing ratio of newly enabled loans (excluding consumer finance subsidiaries) increased from 22.6% in Q1 2023 to 100% in Q1 2024[10] - The overdue rate for loans enabled (excluding consumer finance subsidiaries) for over 30 days was 6.6% as of March 31, 2024, down from 6.9% as of December 31, 2023[11] - As of March 31, 2024, the cumulative number of borrowers increased by 12.4% to approximately 21.7 million from about 19.4 million as of March 31, 2023[10] - Consumer finance loans accounted for 42% of new loan sales in Q1 2024, up from 24% in the same period last year[13] - The NPL rate for consumer finance loans was 1.6% as of March 31, 2024, compared to 1.5% as of December 31, 2023[11] Expense Management - Total expenses decreased by 27% from RMB 8,964 million in Q1 2023 to RMB 6,517 million (approximately USD 903 million) in Q1 2024, mainly due to a 50% reduction in sales and marketing expenses[17] - Sales and marketing expenses decreased by 49.9% from RMB 3,030 million in Q1 2023 to RMB 1,518 million (approximately USD 210 million) in Q1 2024, attributed to reduced loan-related expenses and lower platform service referral costs[18] - General and administrative expenses decreased by 36.2% from RMB 756 million in Q1 2023 to RMB 483 million (approximately USD 67 million) in Q1 2024, due to cost control measures and reduced taxes and surcharges[19] Future Outlook and Strategic Initiatives - The company plans to focus on enhancing its technology platform and expanding its market presence in the upcoming quarters, aiming for a rebound in user engagement and revenue growth[30] - The company has indicated expectations for future growth in retail credit empowerment, driven by increased demand for its services and improved market acceptance[30] - The company is actively exploring potential mergers and acquisitions to strengthen its market position and diversify its service offerings[30] - The company is expected to continue its focus on strategic financial management and operational efficiency in the upcoming quarters[39] Compliance and Governance - The financial results were prepared in accordance with International Financial Reporting Standards, consistent with the accounting policies adopted for the audited consolidated financial statements for the year ended December 31, 2023[3] - The company’s financial advisor and auditor have reported on the estimates made for the financial results, ensuring compliance with relevant regulations[4] - The company cautioned shareholders and potential investors not to overly rely on the Q1 results when making investment decisions[6] - The announcement includes forward-looking statements regarding the company's future business development and financial performance[6] - The company is subject to risks and uncertainties that may affect its future performance, as detailed in filings with the SEC and the stock exchange[6] - The management accounts for the three months ended March 31, 2024, were prepared in accordance with the accounting policies consistent with those adopted in the audited financial statements for the year ended December 31, 2023[38] - The company’s board of directors is responsible for the estimates and has confirmed that they were prepared based on the management accounts[39] - UBS AG has reviewed the basis of the estimates and confirmed that they align with the company’s usual accounting policies[40]

Lufax Holding Ltd (NYSE:LU) Q4 2023 Results Conference Call March 21, 2024 9:00 PM ET Company Participants Xinyan Liu - Head of Board Office and Capital Markets Yong Cho - Co-CEO & Chairman of the Board Gregory Gibb - Co-CEO & Director Siu Choy - Chief Financial Officer Conference Call Participants Emma Xu - BofA Securities Richard Yu - Morgan Stanley Yada Li - CICC Operator Ladies and gentlemen, thank you for standing by, and welcome to Lufax Holding Limited Fourth Quarter 2023 Earnings Call. [Operator Ins ...

Exhibit 99.1 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 6623) (NYSE Stock Ticker: LU) Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. ANNUAL RESULTS ANNOUNCEMENT ...

Financial Performance - For Q4 2023, total revenue was RMB 6,857 million (approximately USD 966 million), a decrease of 44.3% compared to RMB 12,318 million in Q4 2022[7] - The net loss for Q4 2023 was RMB 832 million (approximately USD 117 million), slightly higher than the net loss of RMB 806 million in Q4 2022, representing an increase of 3.3%[7] - The company reported a total income of RMB 34,255 million for the full year 2023, a decrease of 41.1% compared to RMB 58,116 million in 2022[8] - The total expenses for the full year 2023 were RMB 32,610 million, down 27.7% from RMB 45,102 million in 2022[8] - Total revenue for Q4 2023 was RMB 6,857 million (approximately USD 966 million), a decrease of 44.3% compared to RMB 12,318 million in the same period of 2022[14] Loan and Borrower Metrics - As of December 31, 2023, the enabled loan balance was RMB 315.4 billion, down 45.3% from RMB 576.5 billion as of December 31, 2022[8] - The cumulative number of borrowers increased by 10.0% to approximately 20.94 million from about 19.02 million as of December 31, 2022[9] - New loans enabled in Q4 2023 amounted to RMB 47 billion, a decrease of 39.6% compared to RMB 77.8 billion in the same period of 2022[9] - The risk-bearing ratio for new loans enabled (excluding consumer finance subsidiaries) increased from 22.2% in Q4 2022 to 100% in Q4 2023[9] - As of December 31, 2023, the company's risk-bearing loan balance ratio increased from 23.5% on December 31, 2022, to 39.8%[10] Credit Quality and Impairment - The 30-day overdue rate for enabled loans as of December 31, 2023, was 6.9%, up from 6.0% as of September 30, 2023[10] - The non-performing loan (NPL) rate for consumer finance loans as of December 31, 2023, was 1.5%, compared to 1.4% as of September 30, 2023[12] - Credit impairment losses decreased by 43.0% to RMB 3,567 million (approximately USD 502 million) in Q4 2023 from RMB 6,259 million in Q4 2022, attributed to lower loan balances[21] - The company's leverage ratio for its guarantee subsidiary was only 1.8 times, well below the regulatory limit of 10 times[14] Cash Flow and Liquidity - Operating cash flow for Q4 2023 was RMB 4,692,133, a decrease of 2.7% compared to RMB 4,823,634 in Q4 2022[35] - The ending cash and cash equivalents for Q4 2023 stood at RMB 18,480,096, down from RMB 29,537,511 in Q4 2022, indicating a liquidity contraction[35] - For the full year 2023, operating cash flow was RMB 15,030,286, an increase from RMB 4,455,301 in 2022, reflecting strong operational performance[35] - The net cash used in investing activities for the full year 2023 was RMB (5,937,432), a significant decline from RMB 8,447,678 in 2022, indicating a strategic shift in investment[35] Special Dividend and Future Outlook - The estimated special dividend approved by the board is approximately RMB 10 billion, with a per-share amount of USD 2.42 for American Depositary Shares[14] - The company anticipates new loan sales for 2024 to be between RMB 190 billion and RMB 220 billion, with year-end balances expected between RMB 200 billion and RMB 230 billion[13] - The board of directors proposed a special dividend of USD 1.21 per ordinary share or USD 2.42 per American Depositary Share, subject to shareholder approval at the upcoming annual general meeting[24] Operational Changes and Partnerships - The company has established financing partnerships with 85 financial institutions in China, many of which have collaborated with the company for over three years[28] - The company successfully transitioned to a 100% guarantee model, which is expected to achieve full-year profitability for newly enabled loans[12] Miscellaneous - The company’s financial performance is based on the International Financial Reporting Standards and is subject to risks and uncertainties as outlined in their filings with the SEC[3] - The exchange rate used for converting RMB to USD is based on the actual rate of RMB 7.0999 per USD as of December 31, 2023[29] - The company emphasizes that forward-looking statements are based on current expectations and are subject to risks and uncertainties[30]

Financial Performance - The total revenue decreased by 41.1% from RMB 58,116 million for the year ended December 31, 2022, to RMB 34,255 million for the year ended December 31, 2023[3]. - The net profit for the year ended December 31, 2023, was RMB 1,034 million, down from RMB 8,775 million for the year ended December 31, 2022, resulting in a net profit margin of 3%[2]. - The company’s net interest income decreased by 34.9% from RMB 18,981 million for the year ended December 31, 2022, to RMB 12,348 million for the year ended December 31, 2023[4]. - The guarantee income fell by 40.4% from RMB 7,373 million for the year ended December 31, 2022, to RMB 4,392 million for the year ended December 31, 2023[4]. - Net profit decreased by 88.2% from RMB 8,800 million for the year ended December 31, 2022, to RMB 1,000 million for the year ended December 31, 2023[9]. - The company recorded a total comprehensive income of RMB 569,505 thousand for the year ended December 31, 2023, down from RMB 7,194,190 thousand in the previous year[22]. - Basic earnings per share for the year ended December 31, 2023, were RMB 0.77, compared to RMB 7.60 for the previous year, indicating a substantial decrease[24]. Expenses and Cost Management - The total expenses decreased by 27.7% from RMB 45,102 million for the year ended December 31, 2022, to RMB 32,610 million for the year ended December 31, 2023[5]. - Sales and marketing expenses decreased by 37.4% from RMB 15,757 million for the year ended December 31, 2022, to RMB 9,867 million for the year ended December 31, 2023[6]. - General and administrative expenses decreased by 18.6% from RMB 2,830 million for the year ended December 31, 2022, to RMB 2,305 million for the year ended December 31, 2023[6]. - Operating and service expenses decreased by 4.8% from RMB 6,430 million for the year ended December 31, 2022, to RMB 6,119 million for the year ended December 31, 2023[6]. - Credit impairment losses decreased by 23.3% from RMB 16,550 million for the year ended December 31, 2022, to RMB 12,697 million for the year ended December 31, 2023[6]. Loans and Credit Management - The loan balance as of December 31, 2023, was RMB 315.4 billion, a decrease of 45.3% compared to RMB 576.5 billion as of December 31, 2022[3]. - The company achieved a new loan sales risk-bearing increase to 49.8% as of December 31, 2023, compared to 21.3% as of December 31, 2022[1]. - New loans issued in 2023 amounted to RMB 126,598,504 thousand, a significant decrease compared to the previous year[60]. - The total customer loans on the balance sheet as of December 31, 2022, amounted to RMB 218,509,623 thousand, while as of December 31, 2023, it decreased to RMB 136,967,787 thousand[60]. - The expected credit loss ratio increased from 3.23% in 2022 to 5.31% in 2023[57]. - The total expected credit loss provisions as of December 31, 2023, were RMB 7,273,833 thousand, up from RMB 7,062,978 thousand in 2022[61]. - The company wrote off customer loans amounting to RMB 6,572 million in 2023, with ongoing collection efforts for previously written-off amounts[61]. Cash Flow and Liquidity - Cash and cash equivalents decreased from RMB 43,882 million as of December 31, 2022, to RMB 39,599 million as of December 31, 2023[10]. - Operating cash inflow for the year ended December 31, 2023, was RMB 15,030 million, compared to RMB 4,455 million for the year ended December 31, 2022[11]. - Financing cash outflow for the year ended December 31, 2023, was RMB 20,555 million, primarily due to payments for redeeming convertible notes and borrowings[11]. - Cash and cash equivalents decreased to RMB 39,598,785 thousand from RMB 43,882,127 thousand, a reduction of about 10%[25]. - Operating cash flow increased significantly from RMB 4,455,301 thousand in 2022 to RMB 15,030,286 thousand in 2023, representing a growth of approximately 237%[30]. Corporate Governance and Shareholder Returns - The board proposed a special dividend to be paid from the share premium account, subject to shareholder approval at the annual general meeting on May 30, 2024[67]. - The company declared dividends amounting to RMB 1,438,792 thousand during the year[29]. - The company declared a cash dividend of $0.68 per share based on 1,144,226,418 shares for the fiscal year ending December 31, 2022, which was paid on April 2022[66]. - The audit committee, consisting of three independent non-executive directors, oversees the integrity of the company's financial statements and compliance with legal and regulatory requirements[71]. - The company has complied with all applicable provisions of the Corporate Governance Code since its listing date until December 31, 2023, with the exception of the separation of roles between the chairman and CEO[68]. Future Outlook and Strategic Initiatives - The company anticipates growth in retail credit financing and wealth management markets[80]. - Future business development and financial performance are expected to be influenced by economic and regulatory factors[80]. - The company plans to enhance its service demand and market acceptance[80]. - The company aims to expand its market presence and explore new strategies for growth[80].

Financial Performance - Total income for Q3 2023 was RMB8,050 million (US$1,103 million), a decrease of 39.0% compared to RMB13,193 million in Q3 2022[3]. - Net profit for Q3 2023 was RMB131 million (US$18 million), down 90.3% from RMB1,355 million in Q3 2022[5]. - Total expenses decreased by 30.1% to RMB7,747 million (US$1,062 million) in Q3 2023 from RMB11,082 million in Q3 2022[14]. - Basic and diluted earnings per American Depositary Share (ADS) were both RMB0.04 (US$0.01) in Q3 2023, down from RMB0.58 in Q3 2022[18]. - Total income for Q3 2023 was RMB8,050 million (US$1,103 million), compared to RMB13,193 million in Q3 2022, representing a decline of 38.5%[30]. Loan and Credit Metrics - Outstanding balance of loans enabled decreased by 42.5% to RMB366.3 billion as of September 30, 2023, from RMB636.5 billion a year earlier[6]. - New loans enabled in Q3 2023 were RMB50.5 billion, a decrease of 59.2% compared to RMB123.8 billion in Q3 2022[6]. - The take rate for the retail credit enablement business was 7.8%, unchanged from Q3 2022[8]. - The C-M3 flow rate for total loans enabled was 1.1% in Q3 2023, up from 1.0% in Q2 2023[8]. - Non-performing loan (NPL) ratio for consumer finance loans was 1.9% as of September 30, 2023, down from 2.2% as of June 30, 2023[8]. Expenses and Cost Management - Sales and marketing expenses fell by 43.7% to RMB2,290 million (US$314 million) in Q3 2023 from RMB4,071 million in Q3 2022[15]. - General and administrative expenses decreased by 15.6% to RMB500 million (US$69 million) in Q3 2023 from RMB592 million in Q3 2022[21]. - Credit impairment losses decreased by 24.1% to RMB3,001 million (US$411 million) in Q3 2023 from RMB3,956 million in Q3 2022[21]. - Finance costs decreased by 86.9% to RMB40 million (US$5 million) in Q3 2023 from RMB306 million in Q3 2022[21]. Cash Flow and Assets - Cash at bank as of September 30, 2023, was RMB39,781 million (US$5,452 million), down from RMB43,882 million as of December 31, 2022[19]. - Net cash generated from operating activities increased significantly from RMB 2,368,661 in Q3 2022 to RMB 5,057,374 in Q3 2023, marking a growth of approximately 113.4%[32]. - Net cash used in financing activities shifted from an inflow of RMB 4,459,025 in Q3 2022 to an outflow of RMB 8,053,741 in Q3 2023, indicating a change of approximately 280.5%[32]. - Cash and cash equivalents at the end of the period decreased from RMB 30,874,532 in Q3 2022 to RMB 18,828,729 in Q3 2023, a decline of about 39%[32]. - Total assets decreased from RMB 349,262,807 as of December 31, 2022, to RMB 259,176,715 as of September 30, 2023, representing a decline of approximately 25.8%[31]. Liabilities and Equity - Total liabilities decreased from RMB 254,476,132 to RMB 164,851,246, a reduction of approximately 35.2%[31]. - Retained earnings increased from RMB 64,600,234 to RMB 66,331,337, reflecting a growth of about 2.7%[31]. - The company reported a net cash decrease of RMB 10,708,782 for the nine months ended September 30, 2023, compared to a net increase of RMB 4,378,222 for the same period in 2022[32]. - Financial assets at fair value through profit or loss decreased from RMB 29,089,447 to RMB 25,131,471, a decline of approximately 13.8%[31]. - Restricted cash decreased from RMB 26,508,631 to RMB 18,353,723, representing a decline of about 30.9%[31]. Future Plans and Strategic Moves - The company plans to acquire 100% of Ping An OneConnect Bank, pending regulatory approval, to enhance its service offerings[7]. - The company plans to hold an earnings conference call on November 13, 2023, to discuss financial results[20]. - Lufax has established relationships with 91 financial institutions in China, enhancing its funding and credit capabilities[24].

Lufax Holding Ltd (NYSE:LU) Q3 2023 Earnings Conference Call November 13, 2023 8:00 PM ET Company Participants Liu Xinyan - Head of Board Office and Capital Markets Y. S. Cho - Co-CEO and Chairman Gregory Gibb - Co-CEO David Choy - CFO Conference Call Participants Emma Chu - Bank of America Alex Ye - UBS Yada Li - CICC Operator Ladies and gentlemen, thank you for standing by, and welcome to the Lufax Holding Limited Third Quarter 2023 Earnings Call. [Operator Instructions] Please note this event is being re ...

Financial Performance - For Q3 2023, total revenue was RMB 8,050 million (approximately USD 1,103 million), a decrease of 39.0% compared to RMB 13,193 million in Q3 2022[5] - Net profit for Q3 2023 was RMB 131 million (approximately USD 18 million), down 90.3% from RMB 1,355 million in the same period last year[6] - Total revenue for Q3 2023 was RMB 8,050 million (approximately USD 1,103 million), a decrease of 39.0% compared to RMB 13,193 million in Q3 2022[12] - Net profit for the three months ended September 30, 2023, was RMB 130,973 thousand, down 90.3% from RMB 1,354,639 thousand in the same period last year[25] - The company reported a basic earnings per share of RMB 0.08 for the three months ended September 30, 2023, compared to RMB 1.16 for the same period in 2022, a decline of 93.1%[25] Loan and Borrower Metrics - As of September 30, 2023, the enabled loan balance was RMB 366.3 billion, a decline of 42.5% from RMB 636.5 billion a year earlier[7] - The number of cumulative borrowers increased by 6.8% year-over-year to approximately 20.0 million as of September 30, 2023[7] - New enabled loans in Q3 2023 amounted to RMB 50.5 billion, a decrease of 59.2% from RMB 123.8 billion in Q3 2022[7] - The risk-bearing ratio for new enabled loans (excluding consumer finance subsidiaries) rose from 21.7% in the previous year to 54.3% in Q3 2023[8] - The 30-day overdue rate for enabled loans was 6.0% as of September 30, 2023, compared to 5.9% as of June 30, 2023[8] - The non-performing loan (NPL) rate for consumer finance loans was 1.9% as of September 30, 2023, down from 2.2% as of June 30, 2023[8] Expenses and Cost Management - Total expenses for Q3 2023 were RMB 7,747 million (approximately USD 1,062 million), down 30.1% from RMB 11,082 million in Q3 2022[15] - Sales and marketing expenses decreased by 43.7% to RMB 2,290 million (approximately USD 314 million) in Q3 2023 from RMB 4,071 million in Q3 2022[16] - General and administrative expenses decreased by 15.6% from RMB 592 million in Q3 2022 to RMB 500 million (approximately USD 69 million) in Q3 2023, primarily due to cost control measures and a reduction in taxes and additional fees[17] - Operating and service expenses decreased by 7.6% from RMB 1,600 million in Q3 2022 to RMB 1,478 million (approximately USD 203 million) in Q3 2023, attributed to cost control measures and a decrease in loan balances, partially offset by increased resources invested in post-loan services[17] - Technology and analysis expenses decreased by 21.0% from RMB 484 million in Q3 2022 to RMB 382 million (approximately USD 52 million) in Q3 2023, due to optimization of the technology and research team and improved efficiency[17] - Credit impairment losses decreased by 24.1% from RMB 3,956 million in Q3 2022 to RMB 3,001 million (approximately USD 411 million) in Q3 2023, mainly due to a reduction in loan balances leading to decreased provisions for loans and receivables[17] - Financing costs decreased by 86.9% from RMB 306 million in Q3 2022 to RMB 40 million (approximately USD 5 million) in Q3 2023, primarily due to increased interest income from bank deposits and reduced interest from early repayment of convertible notes and other USD debts[18] Cash Flow and Assets - As of September 30, 2023, bank deposits were RMB 39,781 million (approximately USD 5,452 million), down from RMB 43,882 million as of December 31, 2022[20] - As of September 30, 2023, net assets were RMB 94,325 million (approximately USD 12,928 million), slightly down from RMB 94,787 million as of December 31, 2022[20] - The total assets as of September 30, 2023, were RMB 259,176,715 thousand, down from RMB 349,262,807 thousand as of December 31, 2022, representing a decrease of 25.8%[26] - Customer loans decreased to RMB 146,836,102 thousand as of September 30, 2023, from RMB 211,446,645 thousand as of December 31, 2022, a decline of 30.6%[26] - The company’s total liabilities as of September 30, 2023, were RMB 164,851,246 thousand, a decrease of 35.2% from RMB 254,476,132 thousand as of December 31, 2022[26] - The company’s cash and cash equivalents decreased to RMB 39,780,863 thousand as of September 30, 2023, from RMB 43,882,127 thousand as of December 31, 2022, a decline of 9.5%[26] Future Outlook - The company anticipates ongoing challenges in loan demand and market acceptance, impacting future revenue growth[4] - The company plans to acquire 100% equity of Ping An OneConnect Bank, pending approval from the Hong Kong Monetary Authority and shareholders[10] - The company maintained a capital adequacy ratio of 100% for Ping An OneConnect Bank, well above regulatory requirements[10] - The company has established financing and credit enhancement partnerships with 91 financial institutions in China, many of which have collaborated with the company for over three years[22] Investment and Cash Flow Activities - The net cash generated from operating activities for the three months ended September 30, 2023, was RMB 5,057,374 thousand, compared to RMB 2,368,661 thousand for the same period in 2022, representing a significant increase[28] - The net cash used in investing activities for the nine months ended September 30, 2023, was RMB 19,675,057 thousand, compared to RMB 4,459,025 thousand for the same period in 2022, indicating a substantial increase in investment outflows[28] - The cash flow from operating activities for the nine months ended September 30, 2023, was RMB 7,384,143 thousand, which is a significant increase compared to the previous year's figure[28] - The impact of foreign exchange rate changes on cash and cash equivalents was RMB 504,849 thousand for the nine months ended September 30, 2023, compared to RMB 205,975 thousand for the same period in 2022, indicating a notable increase[28] - The total cash and cash equivalents decreased by RMB 6,630,828 thousand in the three months ended September 30, 2023, compared to an increase of RMB 1,471,786 thousand in the same period of 2022[28]