Lufax

Lufax Holding Ltd traces its roots to 2005 and is headquartered in Shanghai, China.  The holding company is incorporated in the Cayman Islands and its shares trade on the NYSE (LU) and the Hong Kong Stock Exchange (6623).  Ping An Group is the controlling shareholder, and Lufax operates as a Ping An-controlled financial services platform.

‍

Lufax focuses on credit enablement for small business owners in China under its Puhui brand, using an offline-to-online model and a nationwide direct sales network to originate and service borrowers.  It connects borrowers with institutional funding partners and runs credit assessment, servicing, and collection capabilities in-house.  As of June 30, 2024, it reported relationships with 85 funding partners and a total outstanding loan balance of RMB235.2 billion, including RMB42.0 billion in consumer finance loans through its licensed consumer finance subsidiary.

‍

The platform has operated at large scale, reporting 20.9 million cumulative borrowers as of December 31, 2023 and over 6.8 million cumulative small business owner borrowers under the Puhui brand.  Alongside credit, Lufax previously enabled wealth management products from third-party financial institutions, then in 2023 it gradually stopped enabling new wealth management products and kept existing products until maturity.  Management frames the core mission around making the borrowing process faster, simpler, and more intuitive for small business owners and other retail borrowers.

Lufax Holding operates as a financial services enabler focused on credit in China. Its core retail credit and enablement business runs under the Puhui brand and targets small business owners that need larger-ticket loans. Customer acquisition combines online touchpoints with an offline sales force, and the company works with institutional funding partners for loan origination and funding.

‍

How Lufax makes money
‍

Lufax’s economics sit across fees and interest tied to loans it enables and loans it holds risk on:

• Enablement service fees linked to loans enabled under Puhui, including underwriting support and loan facilitation for institutional partners.
  ‍
• Guarantee income through its licensed financing guarantee subsidiary. In Q4 2023, Lufax completed a shift to a 100% guarantee model for new loans, where its own guarantee entity provides a guarantee for each new loan transaction without third-party credit enhancement.
  ‍
• Net interest income from its licensed consumer finance subsidiary, which has operated since 2020 and focuses on small-ticket consumer credit.
  ‍

Core activities
‍

1. Borrower acquisition and origination
   A nationwide direct sales team and digital channels source borrowers, with consumer finance also using its own app and traffic platforms.
   ‍
2. Underwriting and pricing
   Credit assessment uses borrower data and, for secured loans, collateral characteristics. Lufax describes using risk analytics built from long operating history and borrower data to match partner risk appetite and product terms.
   ‍
3. Funding partner management
   The platform works with a broad set of financial institutions as funding partners, and it supports partners with borrower referral, risk analytics, and post-loan services.
   ‍
4. Guarantee and credit risk management
   Under the 100% guarantee model, Lufax’s financing guarantee subsidiary provides the guarantee for new loans. The company has increased the share of loans where it bears credit risk, which lifts exposure to credit outcomes.
   ‍
5. Servicing and collections
   Lufax provides post-loan servicing and collection services to help manage performance and partner outcomes.
   ‍

Market position

• Scale with a shifting mix toward consumer finance: As of June 30, 2025, Lufax reported a total outstanding loan balance of RMB193.4 billion, including RMB54.5 billion of consumer finance loans. In Q2 2025, it reported RMB48.9 billion of new loans enabled, including RMB28.9 billion of new consumer finance loans. Cumulative borrowers reached about 27.8 million.
  ‍
• Higher risk retention than a year earlier: Lufax reported it bore risk on 56.7% of outstanding balance as of June 30, 2024, rising to 83.7% as of June 30, 2025. Credit enhancement partners bore 42.2% in June 2024 versus 16.2% in June 2025.
  ‍
• Governance and listing overhang: Trading of its shares on HKEX has been suspended since January 28, 2025. The company has been working through resumption guidance steps, including auditor changes and an internal control review. It has also sought NYSE extensions tied to the delayed 2024 Form 20-F, with a disclosed deadline of April 30, 2026 under an extension framework.
  ‍
• Ping An relationship remains central: Lufax has highlighted deeper operational ties with Ping An Group, including ongoing connected transactions and consumer finance collaboration agreements approved by shareholders for 2026 frameworks.

Lufax’s business remains China-centric, with results driven by its Puhui retail credit enablement franchise and a growing consumer finance arm. In Q3 2025 (ended September 30, 2025), total outstanding loan balance was RMB189.6 billion, down 11.0% year over year, while consumer finance outstanding balance rose to RMB58.9 billion, up 26.7%, showing a continued mix shift toward smaller-ticket consumer credit.

‍

Origination momentum improved. Total new loans enabled reached RMB56.9 billion in Q3 2025, up 12.8% year over year, with consumer finance new loans at RMB31.7 billion, up 20.1%. Cumulative borrowers increased to about 28.5 million as of September 30, 2025.

‍

Risk retention rose further, with Lufax bearing risk on 87.4% of outstanding balance, while credit enhancement partners bore 12.5%. Asset quality indicators in the same update showed DPD 30+ at 5.1% and DPD 90+ at 2.9% (excluding the consumer finance subsidiary), and a 1.1% consumer finance NPL ratio.

‍

The company also stated it continued normal business operations during the HKEX trading suspension period.

Lufax’s near-term trajectory is shaped by two parallel tracks in China: a business mix shift toward consumer finance, and a corporate clean-up aimed at restoring full reporting and listing compliance.

‍

On the operating side, momentum in origination improved in 2025. In Q3 2025, total new loans enabled rose to RMB56.9 billion, with consumer finance new loans at RMB31.7 billion. Cumulative borrowers reached about 28.5 million.  Consumer finance kept expanding even as overall outstanding balances declined. Outstanding consumer finance loans were RMB58.9 billion at September 30, 2025, up year over year, while total outstanding loan balance fell to RMB189.6 billion.  Lufax also reported a higher take rate in retail credit enablement, 13.0% in Q3 2025 versus 9.7% a year earlier.

‍

Key growth drivers include:
‍

1. Consumer finance scaling as the fastest-growing balance pool inside the group.
   ‍
2. Higher risk retention and pricing that lift unit economics when credit holds. Lufax bore risk on 87.4% of outstanding balance as of September 30, 2025.
   ‍
3. Organizational refresh with senior hires and risk leadership changes announced in late 2025.
   ‍

Challenges ahead include:
‍

• Credit sensitivity under higher risk retention. Q3 2025 delinquency indicators moved up, including DPD 30+ at 5.1% (excluding the consumer finance subsidiary).
  ‍
• Reporting and listing overhang. Trading on HKEX has remained suspended since January 28, 2025.  Lufax reported delayed Hong Kong and US filings, an ongoing internal control review led by Deloitte Consulting (Shanghai), and a switch to Ernst and Young as auditor.  The NYSE granted an extension with a stated deadline of April 30, 2026 to file the 2024 Form 20-F.
  ‍
• Reliance on group ecosystem ties. Shareholders approved renewed 2026 connected-transaction frameworks at the December 29, 2025 EGM.