SHANGHAI - Lufax Holding Ltd (NYSE: NYSE:LU), a prominent financial services provider for small business owners in China, disclosed its unaudited financial results for the fourth quarter ended December 31, 2023.
The company reported a net loss of RMB832 million (US$117 million), widening from a loss of RMB806 million in the same quarter last year. This loss equates to an adjusted EPS of -RMB1.48, deteriorating from -RMB1.42 reported in the prior year. Despite the wider loss, shares of Lufax surged over 46% following the announcement of a substantial special dividend.
Total income for the quarter was RMB6,857 million (US$966 million), a significant drop of 44.3% from RMB12,318 million in the fourth quarter of 2022. The decline was attributed to decreases across the company's income streams, including technology platform-based income, net interest income, and guarantee income, which fell by 49.3%, 46.8%, and 47.0% respectively. Additionally, the outstanding balance of loans enabled by Lufax decreased by 45.3% year-on-year to RMB315.4 billion.
Despite the challenging quarter, Lufax's management remains focused on asset quality and has completed major de-risking and diversification initiatives. Mr. YongSuk Cho, Chairman and CEO of Lufax, emphasized the company's strategic adjustments and commitment to prioritizing quality over quantity in the face of complex macro conditions.
For the full year of 2024, Lufax anticipates new loan sales to range between RMB190 billion to RMB220 billion and expects the year-end loan balance to be between RMB200 billion to RMB230 billion. These forecasts are aligned with the company's current market and operational conditions, which may be subject to change.
The board of directors has approved a special dividend of approximately RMB10 billion, with an estimated dividend size of US$2.42 per American Depositary Share (ADS) or US$1.21 per ordinary share, subject to shareholder approval at the annual general meeting scheduled for May 30, 2024. This move underscores Lufax's strong capital position and its commitment to delivering value to shareholders.
Investors reacted positively to the news of the special dividend, with the stock price leaping by 40.27%.
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