LexinFintech Holdings Ltd. Reports Second Quarter 2024 Unaudited Financial Results
LexinFintech Holdings Ltd. (“Lexin”, NASDAQ: LX) announced results that provide valuable insights into its financial performance for the quarter ended June 30, 2024. The company, known for its technology-driven approach to personal finance in China, showed resilience in a challenging economic environment.
Operational Performance Highlights
Chairman and CEO Jay Wenjie Xiao expressed confidence, stating, "We harvested a healthy set of operational and financial results with improved risk performance for new loans." Despite a quarter-over-quarter decline in loan origination of 12%, bringing the total to RMB 51.1 billion, Lexin reported a 12% increase in both total operating revenue and net profit compared to the previous quarter. These results are a testament to the company's effective strategies amid soft consumer demand.
Strategic Developments
During the second quarter, the company's concerted efforts to maintain its strategies resulted in notable milestones. Lexin achieved significant growth in its international business, reaching a new record-low funding cost while improving overall risk management capabilities. Despite fluctuations in some risk performance indicators, many metrics pointed towards improvement.
Funding Costs and Profitability
The historical low in funding costs played a pivotal role in enhancing profitability relative to previous quarters. This strategic adjustment contributed significantly to Lexin's ability to navigate the challenges presented by the current market landscape.
Financial Performance Overview
The financial metrics for the second quarter reflect a robust performance amidst external challenges. Total operating revenue reached RMB 3.6 billion, matching a 19.1% increase year-over-year and a 12.3% increase quarter-over-quarter. The company also reported a net profit of RMB 227 million, reflecting a 12.4% increase from the previous quarter and indicating strong revenue generation.
User Base and Loan Facilitation
By June 30, 2024, Lexin's registered user base expanded to 219 million, a commendable increase of 10.2% from the previous year. Users with credit lines rose to 43.3 million. The company's loan facilitation business also showed a cumulative origination of RMB 1,222.2 billion, a significant 23.8% increase from a year earlier.
Challenges and Risk Management
A closer look at credit performance reveals a 3.7% delinquency ratio, up from 3.0% at the end of March 2024. However, the first payment default rate for new loans remains below 1%. This performance reflects the improvements achieved through proactive risk management strategies, despite the challenges faced during the quarter.
Future Outlook
Looking ahead, Lexin remains committed to navigating both opportunities and challenges in domestic and international markets. The company's management is determined to return sustainable value to shareholders. In line with this commitment, a cash dividend of US$0.072 per ADS for the six-month period ending June 30, 2024, has been declared, representing around 20% of the total net income.
Conclusion
LexinFintech Holdings Ltd. has demonstrated resilience and adaptability in the second quarter of 2024, maintaining a firm grip on its financials amidst external pressures. With strategic investments and a focus on improving credit and funding performance, the company is poised for continued growth in the future.
Frequently Asked Questions
1. What were Lexin's total operating revenues for Q2 2024?
Lexin's total operating revenues for the second quarter of 2024 were RMB 3.6 billion.
2. How did the user base change for Lexin in 2024?
As of June 30, 2024, Lexin's registered user base reached 219 million, a 10.2% increase from the previous year.
3. What was the net profit reported by Lexin in Q2 2024?
Lexin reported a net profit of RMB 227 million for the second quarter of 2024.
4. Was there a dividend declared by Lexin for the first half of 2024?
Yes, Lexin declared a cash dividend of US$0.072 per ADS for the six-month period ended June 30, 2024.
5. How did Lexin manage its funding costs in Q2 2024?
Lexin achieved a historical low funding cost in the second quarter of 2024, effectively boosting profitability compared to the previous quarter.
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