Lufax Reports Fourth Quarter and Full Year 2022 Financial Results.

SHANGHAI: Lufax Holding Ltd ("Lufax" or the "Company") (NYSE: LU), a leading financial services enabler for small business owners in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2022.

Fourth Quarter 2022 Financial Highlights

Total income decreased by 22.2% to RMB12,318 million (US$1,786 million) in the fourth quarter of 2022 from RMB15,831 million in the same period of 2021.

Net loss was RMB806 million (US$117 million) in the fourth quarter of 2022, compared to net profit of RMB2,896 million in the same period of 2021.

(In millions except percentages, unaudited)

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2021

2022

YoY

2021

2022

YoY

RMB

RMB

USD

RMB

RMB

USD

Total income

15,831

12,318

1,786

(22.2 %)

61,835

58,116

8,426

(6.0 %)

Total expenses

(11,492)

(12,922)

(1,874)

12.4 %

(38,435)

(45,102)

(6,539)

17.3 %

Total expenses excluding credit and asset impairment losses,

financial costs and other gains/(losses) - net

(8,302)

(6,574)

(953)

(20.8 %)

(30,194)

(26,889)

(3,899)

(10.9 %)

Credit and asset impairment losses

(3,222)

(6,266)

(908)

94.5 %

(7,745)

(16,978)

(2,462)

119.2 %

Financial costs and other gains/(losses) - net

32

(82)

(12)

(356.3 %)

(496)

(1,236)

(179)

149.2 %

Net profit/(loss)

2,896

(806)

(117)

(127.8 %)

16,709

8,775

1,272

(47.5 %)

Fourth Quarter 2022 Operational Highlights

Outstanding balance of loans enabled decreased by 12.8% to RMB576.5 billion as of December 31, 2022 from RMB661.0 billion as of December 31, 2021.

Cumulative number of borrowers increased by 12.9% to approximately 19.0 million as of December 31, 2022 from approximately 16.8 million as of December 31, 2021.

New loans enabled decreased by 48.7% to RMB77.8 billion in the fourth quarter of 2022 from RMB151.6 billion in the same period of 2021.

During the fourth quarter of 2022, excluding the consumer finance subsidiary, the Company bore risk on 22.2% of its new loans enabled, up from 20.8% in the same period of 2021.

As of December 31, 2022, including the consumer finance subsidiary, the Company bore risk on 23.5% of its outstanding balance, up from 16.6% as of December 31, 2021. Credit enhancement partners bore risk on 72.6% of outstanding balance, among which Ping An P&C accounted for a majority.

For the fourth quarter of 2022, the Company's retail credit enablement business take rate[1] based on loan balance was 7.7%, as compared to 9.0% for the fourth quarter of 2021.

C-M3 flow rate[2] for the total loans the Company had enabled was 1.0% in the fourth quarter of 2022, as compared to 0.8% in the third quarter of 2022. Flow rates for the general unsecured loans and secured loans the Company had enabled were 1.1% and 0.6%, respectively, in the fourth quarter of 2022, as compared to 0.9% and 0.4%, respectively, in the third quarter of 2022.

Days past due ("DPD") 30+ delinquency rate[3] for the total loans the Company had enabled was 4.6% as of December 31, 2022, as compared to 3.6% as of September 30, 2022. DPD 30+ delinquency rate for general unsecured loans was 5.2% as of December 31, 2022, as compared to 4.2% as of September 30, 2022. DPD 30+ delinquency rate for secured loans was 2.6% as of December 31, 2022, as compared to 1.6% as of September 30, 2022.

DPD 90+ delinquency rate[4] for the total loans enabled was 2.6% as of December 31, 2022, as compared to 2.1% as of September 30, 2022. DPD 90+ delinquency rate for general unsecured loans was 3.0% as of December 31, 2022, as compared to 2.4% as of September 30, 2022. DPD 90+ delinquency rate for secured loans was 1.2% as of December 31, 2022, as compared to 0.9% as of September 30, 2022.

Mr. YongSuk Cho, Chairman and Chief Executive Officer of Lufax, commented, "Operating conditions in the fourth quarter were especially challenging, with the adverse macroeconomic environment particularly impacting our core SMB customers. We responded by optimizing our operations to be more agile and efficient, and by prioritizing asset quality over growth through more stringent customer selection. Our focus also includes optimizing credit enhancement approaches to provide further support to our operating margins and business sustainability in the medium term. At the same time, we continued to grow our consumer finance business. As a result, our outstanding balance of consumer finance loans grew from RMB3.6 billion as of December 31, 2020 to RMB29.7 billion as of...