Lufax Holding Ltd (NYSE:LU) Q2 2024 Results Conference Call August 21, 2024 9:00 PM ET

Company Participants

Xinyan Liu - Head of Board Office and Capital Markets
Yong Suk Cho - Co-CEO & Chairman of the Board
Peiqing Zhu - Chief Financial Officer

Conference Call Participants

Emma Xu - Bank of America Securities
Yada Li - CICC

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Lufax Holding Second Quarter 2024 Earnings Call. [Operator Instructions] Please note, this event is being recorded.

Now I'd like to hand the conference over to your speaker host today, Ms. Liu Xinyan, the company's Head of Board Office and Capital Markets. Please go ahead, madam.

Xinyan Liu

Thank you very much. Hello, everyone, and welcome to our second quarter 2024 earnings conference call. Our financial and operating results were released by our newswire services earlier today and are currently available online.

Today, you will hear from our Chairman and CEO, Mr. Y.S. Cho, who will provide an update of the recent developments and the strategies of our business; our CFO, Mr. Peiqing Zhu, will then provide more details on our financial performance and business operations.

Before we continue, I would like to refer you to our safe harbor statement in our earnings press release, which also applies to this call as we will be making forward-looking statements.

With that, I'm now pleased to turn over the call to Mr. Y.S. Cho, Chairman and CEO of Lufax. Please.

Yong Suk Cho

Thank you for joining us today for our second quarter 2024 earnings call. In the second quarter, the macroeconomic environment remains complex for small business owners. Despite this, we saw continued improvements in asset quality across both our Puhui and customer finance businesses as we continued to implement our prudent business strategies. We believe this will provide a solid foundation for our future growth.

Let me provide some updates on the macro situation before we discuss the business details. The SME development index trended down by 0.3 points quarter-over-quarter to 89 in June. Meanwhile, the Business Conditions Index published by the Cheung Kong Graduate School of Business declined from 50.1 in March to 49.3 in June, falling below the 50 threshold and reaching its lowest level for the first half of 2024. These indicators underscore the persistent challenges faced by the small business sector.

Now let me provide some updates on our operating results. First, let's take a look at our loan volume. Our total new loan sales in the second quarter of 2024 were CNY 45.2 billion, representing a 15.5% year-over-year decline. The decline was mainly caused by a 35% year-over-year decrease of Puhui loans, which comprised 51% of total new loan sales in the second quarter, reflecting our continued emphasis on quality over quantity and sluggish demand for Puhui loans on high-quality SBOs.