LexinFintech Holdings Ltd. (LX), a leading personal finance service enabler in China, posted robust financial results for the second quarter of 2024.
The company’s operating revenue surged by 19.1% year-over-year, reaching RMB 3.64 billion, driven by strong performance in credit facilitation and tech-empowerment services, which compensated for declines in its installment e-commerce platform.
LexinFintech’s focus on credit service expansion and innovative fintech solutions showcases its ability to thrive in a complex economic landscape.
Credit Facilitation Revenue Reaches New Highs
LexinFintech’s credit facilitation service income rose 24.9% from Q2 2023 to RMB 2.67 billion. This growth was largely fueled by higher loan facilitation and servicing fees and an increase in the outstanding balance of loans.
Guarantee income also experienced a notable 17% increase, reaching RMB 722 million, bolstered by growth in off-balance sheet loans funded by institutional partnerships.
These achievements underscore Lexin’s strength in credit facilitation and its growing footprint in the loan facilitation market.
The company achieved a record-low funding cost of RMB 90.5 million, down 41.8% from Q2 2023. This drop in funding costs greatly improved LexinFintech’s profit margins, showing its success in cutting expenses and building strong partnerships with funders.
Lower funding costs have allowed the company to maintain profitability while strategically managing credit risk in a challenging environment.
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Tech-Empowerment Service Revenue Soars by 36.5%
The tech-empowerment segment continues to perform well, with income climbing by 36.5% to RMB 535 million in Q2 2024.
Lexin’s commitment to digital transformation for financial institutions has fueled this growth, with the segment’s customer retention rate surpassing 90%.
This reflects Lexin’s position as a leading fintech provider, with solutions that enable financial institutions to optimize their digital capabilities and better serve their customers.
Risk-Managed Loan Origination Amid a Shifting Credit Landscape
LexinFintech carefully reduced loan originations in Q2 to RMB 51.1 billion, a 12% drop from the previous quarter.
This approach allowed the company to maintain high credit quality, with a first-payment default rate below 1% on newly originated loans.
Although the 90-day delinquency rate rose slightly to 3.7%, Lexin’s proactive risk management practices kept performance within an acceptable range.
Additionally, Lexin’s international operations saw accelerated growth, outpacing domestic performance during the quarter.
This expansion highlights the company’s commitment to diversification and its ability to adapt its business model for international markets.
While still in the early stages, the company’s global ambitions represent a promising avenue for future revenue generation.
LexinFintech declared a semi-annual dividend of $0.072 per ADS for the six months ending June 30, 2024.
This payout represents approximately 20% of total net income, underscoring Lexin’s commitment to consistent capital returns for its investors.
Strong Position for Sustainable Growth in 2024
LexinFintech’s Q2 2024 performance reinforces its strength in navigating an evolving economic landscape.
Through disciplined risk management, reduced funding costs, and a growing presence in international markets, Lexin remains well-positioned for continued growth.
By aligning its operations with long-term strategic goals, Lexin is poised to deliver sustained value to shareholders and capture new opportunities in the expanding fintech industry.
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