Lufax Expects Third-Quarter Net Loss of Up to RMB 1.7 Billion
Key Facts
Lufax expects to report a net loss of between RMB 1.3 billion and RMB 1.7 billion for the three months ended September 30, 2026, according to a company filing with the U.S. Securities and Exchange Commission. The estimate was based on a preliminary review of unaudited management accounts, indicating losses continued after the first half of the year. The company reported a net loss of about RMB 694 million in the first six months of 2026. Lufax said it incurred an operating loss in the third quarter, "mainly as a result of increased credit impairment losses." The company linked part of the expected loss to credit pressures, and also cited tax and financing factors.
The loss range announced by the company is a preliminary estimate for the period ended September 30, not a final audited result. Lufax said the estimate had not been reviewed by its audit committee or external auditors and "may be subject to adjustments." The reported figures therefore remain subject to change before final results are released. The warning follows the company’s report that its net loss in the first half was about RMB 694 million, while the public filing did not specify a final figure for the third quarter. The filing focused on the expected loss and its causes, and provided no documented numerical details in the available text on total quarterly income or expenses.
In addition to credit losses, the company expects to record additional tax expenses as a result of a decline in deferred tax assets at its subsidiary, a financial guarantee company. Lufax attributed the decline to its assessment of the subsidiary’s business and financial performance. This item adds tax pressure to the operating loss that the company said was mainly caused by higher credit impairment losses. The filing also referred to an adjustment to the financing plan following the redemption at maturity of An Ke Technology’s convertible bonds. The revised plan includes, according to the company, distributions from domestic subsidiaries to overseas companies, with additional tax expenses expected.
Second-quarter data published in August provide context on the lending business before the new warning. Outstanding loan balance stood at RMB 167.3 billion on June 30, 2026, compared with RMB 193.4 billion on the same date in 2025, a year-on-year decline of 13.5%. By contrast, the cumulative number of borrowers rose 13.1% to about 31.4 million, from about 27.8 million a year earlier. The company reported total income of RMB 6.227 billion in the second quarter, versus RMB 7.365 billion in the comparable quarter, a decline of 15.5%. Lufax said the operating environment for small business owners remained difficult in the quarter and demand for financing remained weak.
In the second quarter, the company said it narrowed its net loss to RMB 82 million, down 86.2% from the comparable period, attributing the improvement to greater operating efficiency and support from its consumer finance business. That puts the reported second-quarter result in a different context from the expected third-quarter loss, which the company attributed mainly to higher credit impairment losses, alongside additional tax expenses. Lufax scheduled a conference call to discuss its third-quarter results for October 27, 2026, at 9 p.m. Eastern Time, corresponding to October 28 at 9 a.m. Beijing time. The call comes after the results are scheduled to be announced on October 27. The discussion is expected to provide an opportunity to present details of the quarterly results and review the company’s preliminary loss estimate.