FAST NEWS: LexinFintech’s Revenue, Profit Plunge on Weak Demand for Loans

The latest: Online lending platform LexinFintech Holdings Ltd. (LX.US) on Monday reported its revenue plunged 41.8% year-on-year to 1.7 billion yuan ($255 million) in the first quarter of 2022, while its profit fell 89% to 78.1 million yuan.

Looking Up: The company’s registered user base rose 29.4% by the end of March to 171 million from 132 million a year earlier.

Take Note: The number of active users of the company’s loan products fell 30.7% year-on-year to 5.7 million in this year’s first quarter from 8.2 million a year earlier. Its 90-day loan delinquency ratio also rose to 2.4% at the end of March from 1.84% a year earlier.

Digging Deeper: LexinFintech is among a former group of privately owned online lenders that have transformed to loan facilitators over the last three years. The companies made their decision after a government crackdown on private lenders, including a major new wave of regulation on the group. By comparison, their current role as loan intermediaries between consumers and banks is more lightly regulated, but less lucrative. Lexin blamed the latest declines on lower consumption due to the effects of Covid-19 business disruptions. Those include widespread shop closures, and lockdowns to control the virus that have left many people confined to their homes.

Market Reaction: Lexin shares fell 15% on Tuesday after the report’s release to close near an all-time low.

Reporting by Doug Young

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