Lufax Reports Second Quarter 2022 Financial Results

SHANGHAI,Aug. 5,2022 --Lufax Holding Ltd ("Lufax" or the "Company") (NYSE: LU),a leading technology-empowered personal financial services platform in China,today announced its unaudited financial results for the second quarter ended June 30,2022.

Second Quarter 2022 & First Half 2022 Financial Highlights

Total income increased by 3.1% to RMB15,288 million (US$2,282 million) in the second quarter of 2022 from RMB14,828 million in the same period of 2021.

Net profit decreased by 37.9% to RMB2,936 million (US$438 million) in the second quarter of 2022 from RMB4,729 million in the same period of 2021.

(In millions except percentages,

unaudited)

Three Months Ended June 30,

2021

2022

YoY

RMB

RMB

USD

Total income

14,828

15,288

2,282

3.1%

Total expenses

(8,477)

(10,935)

(1,633)

29.0%

Total expenses excluding credit

and asset impairment losses,financial

costs and other losses

(7,107)

(6,322)

(944)

(11.0%)

Credit and asset impairment losses,

financial costs and other losses

(1,370)

(4,613)

(689)

236.7%

Net profit

4,729

2,936

438

(37.9%)

(In millions except percentages,

unaudited)

Six Months Ended June 30,

2021

2022

YoY

RMB

RMB

USD

Total income

30,079

32,604

4,868

8.4%

Total expenses

(17,007)

(21,099)

(3,150)

24.1%

Total expenses excluding credit and

asset impairment losses,financial

costs and other losses

(14,162)

(13,569)

(2,026)

(4.2%)

Credit and asset impairment losses,

financial costs and other losses

(2,845)

(7,529)

(1,124)

164.6%

Net profit

9,697

8,226

1,228

(15.2%)

Second Quarter 2022 & First Half 2022 Operational Highlights

Retail credit facilitation business:

Outstanding balance of loans facilitated increased by 9.0% to RMB661.4 billion as of June 30,2022 from RMB606.8 billion as of June 30,2021.

Cumulative number of borrowers increased by 17.3% to approximately 18.2 million as of June 30,2022 from approximately 15.5 million as of June 30,2021.

During the second quarter of 2022,excluding the consumer finance subsidiary,86.1% of new loans facilitated were disbursed to small business owners,up from 77.6% in the same period of 2021.

New loans facilitated decreased by 15.2% to RMB129.5 billion in the second quarter of 2022 from RMB152.7 billion in the same period of 2021.

During the second quarter of 2022,the Company bore risk on 21.7% of its new loans facilitated,up from 16.0% in the same period of 2021.

As of June 30,2022,including the consumer finance subsidiary,the Company bore risk on 21.2% of its outstanding balance,up from 11.3% as of June 30,2021.

For the second quarter of 2022,the Company's retail credit facilitation revenue take rate[1] based on loan balance was 8.6%,as compared to 9.7% for the second quarter of 2021.

C-M3 flow rate[2] for the total loans the Company had facilitated was 0.7% in the second quarter of 2022,as compared to 0.6% in the first quarter of 2022. Flow rates for the general unsecured loans and secured loans the Company had facilitated were 0.8% and 0.3%,respectively,in the second quarter of 2022,as compared to 0.7% and 0.2%,in the first quarter of 2022.

Days past due ("DPD") 30+ delinquency rate[3] for the total loans the Company had facilitated was 3.1% as of June 30,as compared to 2.6% as of March 31,2022. DPD 30+ delinquency rate for general unsecured loans was 3.6% as of June 30,as compared to 3.0% as of March 31,2022. DPD 30+ delinquency rate for secured loans was 1.4% as of June 30,as compared to 1.0% as of March 31,2022.

DPD 90+ delinquency rate[4] for the total loans facilitated was 1.7% as of June 30,as compared to 1.4% as of March 31,2022. DPD 90+ delinquency rate for general unsecured loans was 2.0% as of June 30,as compared to 1.6% as of March 31,2022. DPD 90+ delinquency rate for secured loans was 0.7% as of June 30,as compared to 0.5% as of March 31,2022.

Wealth management business:

Total number of registered users grew to 52.3 million as of June 30,2022 from 47.1 million as of June 30,2021.

Total number of active investors grew to 15.2 million as of June 30,2022 from 14.8 million as of June 30,2021.

Total client assets grew by 2.6% to RMB431.9 billion as of June 30,2022 from RMB421.1 billion as of June 30,2021.

The 12-month investor retention rate was 94.7% as of June 30,as compared to 96.0% as of June 30,2021.

Contribution to total client assets from customers with investments of more than RMB300,000 on the Company's platform increased to 81.6% as of June 30,2022 from 80.2% as of June 30,the annualized take rate[5] for current products and services on the Company's wealth management platform was 43.1 bps,down from 53.9 bps during the first quarter of 2022.

Mr.YongSuk Cho,Chairman and Chief Executive Officer of Lufax,commented,"In the face of COVID-19 resurgence severely impacting our core client base of small business owners,we remain prudent in our operations and prioritize asset quality over volume growth. At the same time,we are witnessing an improvement in the regulatory environment,as the recently released policy statements seek to balance incentivizing and regulating the platform economy. With our key initiatives launched last year starting to bear fruit,we believe that the most challenging time is now behind us. Our C-M3 monthly flow rate,which is a leading risk indicator,peaked in April at 0.83% from 0.53% in December and decreased to 0.61% in June. Going forward,we remain committed to serving the financial needs of small business owners in our retail credit facilitation business and helping our customers in the online fund distribution space to achieve their financial planning objectives in our wealth management business. With a re-aligned seasoned executive team and a long proven track record of making preemptive adjustments to adapt to the changing environment,we are confident that the strategic initiatives we have implemented will generate sustainable value for our shareholders and the real economy at large."

Mr. Gregory Gibb,Co-Chief Executive Officer of Lufax,"As recent policy announcements indicate increased recognition of the constructive role that credit insurance can play in funding availability for small business owners,we attained positive regulatory feedback on our guarantee company and its position in data transmission to our funding partners. In the second quarter,the average APR for outstanding loan balance wide reached 21.4%,down from 21.8% in the previous quarter. Credit insurance provided by our seven insurance partners to customers covered 76% of our new loans. Meanwhile,our sales channel transformation made additional progress with increased direct sales contribution and improved sourcing quality. New business sourced from Ping An channels in the second quarter declined to 22% from 31% a year ago. Our direct sales made up 53.6% of new loan sales in the second quarter,up from 49.0% a year ago. As of June 30,the percentage of high quality talents[6] in our direct sales force had increased from the first quarter,as we continue to execute our channel transformation. In fact,in the second quarter,we witnessed a 17% year-over-year increase in number of loan applications per direct sales. In addition,we further improved our funding costs across our partner network. In the second quarter overall bank and institutional funding costs decreased by about 10 basis points,while our number of funding partners in the quarter reached 78. While we are confident that our robust balance sheet and low leverage ratio should lead to a speedy resumption in our business growth once the macro environment stabilizes,we are taking a prudent approach in our financial forecast and full year guidance. Should we experience more aggressive economic policy support in 2023 and beyond,we may deliver positive surprises to the upside."

Mr. David Choy,Chief Financial Officer of Lufax,"Despite a very challenging macro environment during the second quarter,we achieved positive top-line growth of 3.1% quarter over quarter,or 8.4% growth for the first half of the year. Our total expenses in the second quarter,excluding credit impairment losses,asset impairment losses,finance costs and other losses,actually decreased by 11.0%,with sales and marketing expenses decreasing by 19%. With the balance of our cash at bank increasing to RMB42.9 billion and liquid assets maturing in 90 days or less amount to RMB42.37 billion,as of June 30,2022. The leverage ratio of our guarantee company remaining as low as 2.03x versus the regulatory allowance of 10x,we are well equipped with operating flexibility and abundant capital and cash to weather the economic downturn,whilst maintaining our dividend payout. While market volatility brought on by COVID resurgence and the uncertain macroeconomic conditions on the horizon may keep our new business growth stalled for the short term,we believe that our profit growth will likely re-accelerate once the channel optimization impact starts to materialize and credit costs become normalized on an annual basis."

Second Quarter 2022 & First Half Financial Results

TOTAL INCOME

Total income increased by 3.1% to RMB15,288million (US$2,282million) in the second quarter of 2022 from RMB14,828million in the same period of 2021. The Company's revenue mix changed with the evolution of its business model,as it gradually bore more credit risk and increased funding from consolidated trust plans that provided lower funding costs.

Three Months Ended June 30,

(In millions except percentages,unaudited)

2021

2022

YoY

RMB

% of total

income

RMB

% of total

income

Technology platform-based income

9,601

64.7%

7,380

48.3%

(23.1%)

Retail credit facilitation service fees

9,194

62.0%

6,912

45.2%

(24.8%)

Wealth management transaction and service fees

407

2.7%

467

3.1%

14.7%

Net interest income

3,227

21.8%

5,010

32.8%

55.3%

Guarantee income

891

6.0%

1,936

12.7%

117.3%

Other income

1,071

7.2%

532

3.5%

(50.3%)

Investment income

37

0.2%

428

2.8%

1056.8%

Share of net profits of investments accounted for

using the equity method

2

0.0%

2

0.0%

0.0%

Total income

14,828

100%

15,288

100%

3.1%

Six Months Ended June 30,unaudited)

2021

2022

YoY

RMB

% of total

income

RMB

% of total

income

Technology platform-based income

19,891

66.1%

16,672

51.1%

(16.2%)

Retail credit facilitation service fees

18,859

62.7%

15,612

47.9%

(17.2%)

Wealth management transaction and service fees

1,032

3.4%

1,060

3.3%

2.7%

Net interest income

6,138

20.4%

9,994

30.7%

62.8%

Guarantee income

1,442

4.8%

3,838

11.8%

166.2%

Other income

2,109

7.0%

1,236

3.8%

(41.4%)

Investment income

526

1.7%

863

2.6%

64.1%

Share of net profits of investments accounted for

using the equity method

(28)

(0.1%)

1

0.0%

(103.6%)

Total income

30,079

100%

32,604

100%

8.4%

Technology platform-based income decreased by 23.1% to RMB7,380 million (US$1,102 million) in the second quarter of 2022 from RMB9,601 million in the same period of 2021 due to a decrease in retail credit facilitation service fees.

- Retail credit facilitation service feesdecreased by 24.8%to RMB6,912 million (US$1,032million) in the second quarter of 2022 from RMB9,194million in the same period of 2021,mainly due to a decrease in new loan sales,and changesin the Company's business model that resulted in more income being recognized in net interest income and guarantee income.

- Wealth management transaction and service fees increased by 14.7% to RMB467million (US$70million) in the second quarter of 2022 from RMB407million in the same period of 2021. The increase was mainly driven by the increase in fees generated from the Company's current products and services,partially offset by the run-off of legacy products.

Net interest income increased by 55.3% to RMB5,010 million (US$748 million) in the second quarter of 2022 from RMB3,227 million in the same period of 2021,mainly as a result of 1) the Company's increased usage of trust funding channels that were consolidated by the Company (as of June 30,the Company's on-balance sheet loans accounted for 36.0% of its total loan balance under management,as compared to 27.8% as of June 30,2021),and 2) increase in the consumer finance loans.

Guarantee income increased by 117% to RMB1,936 million (US$289 million) in the second quarter of 2022 from RMB891 million in the same period of 2021,primarily due to the increase in the loans for which the Company bore credit risk.

Other income decreased to RMB532 million (US$79 million) in the second quarter of 2022 from RMB1,071 million in the same period of 2021,mainly due to the change of service scope and fee structure that the Company provided and charged to its financial institution partners.

Investment income increased to RMB428 million (US$64 million) in the second quarter of 2022 from RMB37 million in the same period of 2021,mainly due to the lower base in the second quarter of 2021 as a result of fair value losses from investments.

TOTAL EXPENSES

Total expenses increased by 29.0% to RMB10,935million (US$1,633 million)in the second quarter of 2022 from RMB8,477million in the same period of 2021. This increase was mainly driven by credit impairment losses,since credit impairment losses increased by 152% to RMB3,513 million (US$524 million) in the second quarter of 2022 from RMB1,394 million in the same period of 2021.Total expenses excluding credit impairment losses,finance costs and other losses decreased by 11.0% to RMB6,322million (US$944 million)in the second quarter of 2022 from RMB7,107million in the same period of 2021.

Three Months Ended June 30,unaudited)

2021

2022

YoY

RMB

% of total

income

RMB

% of total

income

Sales and marketing expenses

4,316

29.1%

3,496

22.9%

(19.0%)

General and administrative expenses

798

5.4%

762

5.0%

(4.5%)

Operation and servicing expenses

1,476

10.0%

1,581

10.3%

7.1%

Technology and analytics expenses

517

3.5%

483

3.2%

(6.6%)

Credit impairment losses

1,394

9.4%

3,513

23.0%

152.0%

Asset impairment losses

2

0.0%

352

2.3%

NA

Finance costs

276

1.9%

221

1.4%

(19.9%)

Other (gains)/losses - net

(301)

(2.0%)

527

3.4%

(275.1%)

Total expenses

8,477

57.2%

10,935

71.5%

29.0%

Six Months Ended June 30,unaudited)

2021

2022

YoY

RMB

% of total

income

RMB

% of total

income

Sales and marketing expenses

8,549

28.4%

7,980

24.5%

(6.7%)

General and administrative expenses

1,651

5.5%

1,487

4.6%

(9.9%)

Operation and servicing expenses

2,998

10.0%

3,171

9.7%

5.8%

Technology and analytics expenses

963

3.2%

931

2.9%

(3.3%)

Credit impairment losses

2,447

8.1%

6,336

19.4%

158.9%

Asset impairment losses

2

0.0%

352

1.1%

NA

Finance costs

560

1.9%

432

1.3%

(22.9%)

Other (gains)/losses - net

(163)

(0.5%)

409

1.3%

(350.9%)

Total expenses

17,007

56.5%

21,099

64.7%

24.1%

Sales and marketing expenses decreased by 19.0% to RMB3,496 million (US$522 million) in the second quarter of 2022 from RMB4,316 million in the same period of 2021.

- Borrower acquisition expensesdecreased by 37.6% to RMB1,648million (US$246million) in the second quarter of 2022 from RMB2,643 million in the same period of 2021. The decrease was mainly due to decreased new loan sales,increased sales productivity and continual optimization of commissions.

- Investor acquisition and retention expensesdecreased by 36.7% to RMB107million (US$16million) in the second quarter of 2022 from RMB169million in the same period of 2021,mostly due to the improvement in the Company's investor acquisition efficiency.

- General sales and marketing expensesincreased by 15.8% to RMB1,741 million (US$260 million) in the second quarter of 2022 from RMB1,503 million in the same period of 2021. This increase was primarily due to the increase in sales cost related to platform services[7] and the increase in the staff costs for sales and marketing personnel.

General and administrative expenses decreased by 4.5% to RMB762 million (US$114 million) in the second quarter of 2022 from RMB798 million in the same period of 2021 as a result of the Company's expense control measures.

Operation and servicing expenses increased by 7.1% to RMB1,581 million (US$236 million) in the second quarter of 2022 from RMB1,476 million in the same period of 2021,primarily due to the increase of trust plan management expenses,which resulted from the increase in consolidated trust plans.

Technology and analytics expenses decreased by 6.6% to RMB483 million (US$72 million) in the second quarter of 2022 from RMB517 million in the same period of 2021,as a result of the Company's improved efficiency.

Credit impairment losses increased by 152% to RMB3,394 million in the same period of 2021,mainly driven by 1) the increase of provision and indemnity loss driven by increased risk exposure,and 2) the change in credit performance due to impact of the COVID-19 outbreak.

Asset impairment losses increased to RMB352 million (US$53 million) in the second quarter of 2022 from RMB2 million in the same period of 2021,mainly due to an impairment loss of long-term investment.

Finance costs decreased by 19.9% to RMB221 million (US$33 million) in the second quarter of 2022 from RMB276 million in the same period of 2021,mainly due to the increase in interest income resulting from the increase in deposits.

Other losses were RMB527 million (US$79 million) in the second quarter of 2022 compared to other gains of RMB301 million in the same period of 2021,mainly due to the foreign exchange loss in the second quarter of 2022.

[1]The take rate of retail credit facilitation business is calculated by dividing the aggregated amount of retail credit facilitation service fee,net interest income,guarantee income and the penalty fees and account management fees by the average outstanding balance of loans facilitated for each period.

[2]Flow rate estimates the percentage of current loans that will become non-performing at the end of three months,and is defined as the product of (i) the loan balance that is overdue from 1 to 29 days as a percentage of the total current loan balance of the previous month,(ii) the loan balance that is overdue from 30 to 59 days as a percentage of the loan balance that was overdue from 1 to 29 days in the previous month,and (iii) the loan balance that is overdue from 60 to 89 days as a percentage of the loan balance that was overdue from 30 days to 59 days in the previous month. Loans from legacy products and consumer finance subsidiary are excluded from the flow rate calculation.

[3]DPD 30+ delinquency rate refers to the outstanding balance of loans for which any payment is 30 to 179 calendar days past due divided by the outstanding balance of loans. Loans from legacy products and consumer finance subsidiary are excluded from the calculation.

[4]DPD 90+ delinquency rate refers to the outstanding balance of loans for which any payment is 90 to 179 calendar days past due divided by the outstanding balance of loans. Loans from legacy products and consumer finance subsidiary are excluded from the calculation.

[5]The take rate for the wealth management business is calculated by dividing total wealth management transaction and service fees for current products by average client assets in the Company's current products. Part of the wealth management transaction and service fees do not generate client assets.

[6]High quality talent refers to talent who have (i) bachelor degree; (ii) sales experience; and,(iii) obtained A scoring in interview

[7] The liquid assets consist of Cash at bank,Financial assets at amortized cost,Financial Assets purchased under reverse repurchase agreements and Financial assets at fair value through profit or loss with a maturity of 90 days or less as of June 30,2022.

NET PROFIT

Net profit decreased by 37.9% toRMB2,936million (US$438 million) in the second quarter of 2022 from RMB4,729million in the same period of 2021,driven bythe aforementioned factors.

EARNINGS PER ADS

Basic and diluted earnings per American Depositary Share ("ADS") were RMB1.27 (US$0.19) and RMB1.23 (US$0.18),in the second quarter of 2022.

BALANCE SHEET

The Company had RMB42,863 million (US$6,399million) in cash at bank as of June 30,as compared to RMB34,743 million as of December 31,2021. Net assets of the Company is amounted to RMB97,238 million (US$14,517 million) as of June 30,as compared to RMB94,559 million as of December 31,2021.

Recent Developments­

Change of Annual Dividend Policy to Semi-Annual Dividend Policy

The Company's board of directors (the "Board") has approved a semi-annual cash dividend policy to replace its existing annual dividend policy. Under the semi-annual dividend policy,starting from the second half of 2022,the Company will declare and distribute a recurring cash dividend semi-annually,at an amount equivalent to approximately 20%-40% of the Company's net profit in the previous six-month period,or as otherwise authorized by the Board. The determination to make dividend distributions and the exact amount of such distributions in any particular semi-annual period will be based upon the Company's operations and earnings,cash flow,financial condition,and other relevant factors,and subject to adjustment and determination by the Board.

Semi-Annual Dividend

The Board has approved a cash dividend of US$0.34 per ordinary share for the six-month period ended June 30,on the Company's outstanding shares to shareholders of record as of the close of trading on the New York Stock Exchange on October 13,2022. Holders of ADSs,each two ADSs representing one ordinary share,will accordingly be entitled to a cash dividend of US$0.17 per ADS,subject to the payment of applicable depositary fees. The depositary,Citibank,N.A.,will distribute the dividend to holders of ADSs on or about October 28,2022.

Changes in Board Composition and Management Team

Mr. Guangheng Ji has tendered his resignation as the Chairman of the Board and will no longer serve as a member of the Board. Mr. YongSuk Cho,currently a director and Co-Chief Executive Officer of the Company,has been appointed as the Chairman of the Board and Chief Executive Officer of the Company. Mr. Gregory Dean Gibb will remain as Co-Chief Executive Officer and a director of the Company. In addition,Mr. Hanjie Ou has been appointed as a director of the Company.

Mr. Hanjie Ou currently serves as Senior Manager of the Corporate Planning Center at Ping An Group,where he is mainly responsible for the planning and management of core financial institutions of Ping An Group and key strategic projects within Ping An Group. Mr. Ou has rich experience in the financial industry. Prior to joining Ping An Group in 2018,Mr. Ou has served as Senior Project Manager at Roland Berger Strategy Consulting in Shanghai from 2015 to 2018. Mr. Ou received a Master's Degree in Operations Research from London School of Economics and Political Science in 2008.

Mr. David Siu Kam Choy,currently the Controller of the Company and the Chief Financial Officer of Puhui,has been appointed as the Chief Financial Officer of the Company. Mr. Jian Yang has tendered his resignation as the Chief Risk Officer of the Company and Ms. Younjeong Lim has been appointed as the Chief Risk Officer of the Company. Mr. Dongqi Chen has been appointed as the General Manager of the Company.

Mr. David Siu Kam Choy has been the Controller of the Company from August 2020 to August 2022. He has also been the Chief Financial Officer of Puhui since October 2018. Mr. Choy served in various positions at KPMG Hong Kong and Ernst & Young Beijing,Guangzhou and Hong Kong from September 1997 to September 2005,and served as the Financial Controller of Shenzhen Development Bank Company Limited (now known as Ping An Bank Co.,Ltd.) from October 2005 to March 2007. Mr. Choy subsequently joined Ping An Insurance Group where he served as the Deputy General Manager of Group Finance Department from March 2007 to January 2009,Deputy General Manager of Group Planning Department from January 2009 to March 2014,and General Manager of Group Treasury Department from March 2014 to September 2018. Representing Ping An Insurance during his service at the group,Mr. Choy also served in various directorship roles within the Ping An Group,namely,Chairman of China Ping An Insurance Overseas (Holdings) Limited,non-executive director of each of Shenzhen Ping An Fintech Company,Ping An Asset Management (HK) Limited,Ping An Real Estate Company and Ping An Yiqianbao e-commerce Company. Mr. Choy obtained his Bachelor's Degree in Business Administration major in finance from the Hong Kong University of Science & Technology in 1997 and his Master's Degree in Corporate Governance and Directorship from the Hong Kong Baptist University in 2014. He also completed the senior executives program in corporate governance at Stanford University in 2016.

Ms. Younjeong Lim currently serves as Vice President and Chief Risk Officer of Puhui,where she is responsible for the comprehensive risk management of retail lending business of the Company. Ms. Lim has led the transformation of Puhui's risk management system from a traditional model into a technology-supported,data-driven online model. Prior to joining Puhui in 2008,Ms. Lim has served as the Head of Consumer Finance Risk Management Department of Standard Chartered Bank in Korea from 2006 to 2008 and the Head of Credit Card Business Planning Department of Citibank in Korea from 1999 to 2005. Ms. Lim received her Master's Degree in Economics from Ohio State University in 1996.

Mr. Dongqi Chen currently serves as Chairman of Ping An Consumer Finance Co.,Ltd. and General Manager of Puhui. Mr. Chen has over 25 years of experience in sales management and the financial industry. Prior to his current positions,Mr. Chen has served as Executive Deputy General Manager of Puhui from 2017 to 2020,Deputy General Manager of Puhui from 2016 to 2017,and Assistant to the General Manager of Puhui from 2015 to 2016. Mr. Chen has served as Chairman and General Manager of Ping An Insurance Agency Co.,Ltd. from 2014 to 2018 and held a number of positions in Ping An Property & Casualty Insurance Company of China Ltd. from 1996 to 2014,including as Assistant to General Manager of the Credit Guarantee Insurance Business Unit from 2013 to 2014. Mr. Chen received his Bachelor's Degree in Insurance from Nankai University in 1991.

Business Outlook

For the second half of 2022,the Company expects its new loans facilitated to decrease by 8% to 17% year over year to the range of RMB270 billion to RMB296 billion,client assets to decrease by 1% to 10% year over year to the range of RMB390 billion to RMB430 billion,total income to decrease by 8% to 13% year over year to the range of RMB27.7 billion to RMB29.1 billion,and net profit to decrease by 26% to 33% year over year to the range of RMB4.7 billion to RMB5.2 billion.

For the full year of 2022,the Company expects its new loans facilitated to decrease by 9% to 13% year over year to the range of RMB563 billion to RMB590 billion,total income to decrease by 0% to 3% year over year to the range of RMB60.3 billion to RMB61.7 billion,and net profit to decrease by 20% to 22% year over year to the range of RMB13.0 billion to RMB13.4 billion. If non-cash foreign exchange losses were excluded from the calculation of net profit,then the Company's expectation would be for a decrease in net profit for the full year of 2022 of between 14% and 17%.

These forecasts reflect the Company's current and preliminary views on the market and operational conditions,which are subject to change.

Conference Call Information

The Company's management will hold an earnings conference call at 9:00 P.M. U.S. Eastern Time on Thursday,August 4,2022 (9:00 A.M. Beijing Time on Friday,August 5,2022) to discuss the financial results. For participants who wish to join the call,please complete online registration using the link provided below in advance of the conference call. Upon registering,each participant will receive a participant dial-in number,the Direct Event passcode,and a unique access PIN,which can be used to join the conference call.

Registration Link: https://ige.netroadshow.com/registration/q4inc/11391/lufax-holding-ltd-second-quarter-2022-earnings-conference-call/

A replay of the conference call will be accessible through August 11,2022 (dial-in numbers: +1 (866) 813-9403 or +1 (226) 828-7578; replay access code: 311080). A live and archived webcast of the conference call will also be available at the Company's investor relations website at https://ir.lufaxholding.com.

About Lufax

Lufax Holding Ltd is a leading technology-empowered personal financial services platform in China. Lufax Holding Ltd primarily utilizes its customer-centric product offerings and offline to-online channels to provide retail credit facilitation services to small business owners and salaried workers in China as well as tailor-made wealth management solutions to China's rapidly growing middle class. The Company has implemented a unique,capital-light,hub-and-spoke business model combining purpose-built technology applications,extensive data,and financial services expertise to effectively facilitate the right products to the right customers.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted,all translations from RMB to U.S. dollars are made at a rate of RMB6.6981 to US$1.00,the rate in effect as of June 30,as certified for customs purposes by the Federal Reserve Bank of New York.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Statements that are not historical facts,including statements about Lufax's beliefs and expectations,are forward-looking statements. Lufax has based these forward-looking statements largely on its current expectations and projections about future events and financial trends,which involve known or unknown risks,uncertainties and other factors,all of which are difficult to predict and many of which are beyond the Company's control. These forward-looking statements include,but are not limited to,statements about Lufax's goals and strategies; Lufax's future business development,financial condition and results of operations; expected changes in Lufax's income,expenses or expenditures; expected growth of the retail credit facility and wealth management markets; Lufax's expectations regarding demand for,and market acceptance of,its services; Lufax's expectations regarding its relationship with borrowers,platform investors,funding sources,product providers and other business partners; general economic and business conditions; and government policies and regulations relating to the industry Lufax operates in. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in Lufax's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release,and Lufax does not undertake any obligation to update any forward-looking statement,except as required under applicable law.

Investor Relations Contact

Lufax Holding Ltd

Email: Investor_Relations@lu.com

ICR,LLC

Robin Yang

Tel: +1 (646) 308-0546

Email: lufax.ir@icrinc

LUFAXHOLDING LTD

UNAUDITED INTERIM CONDENSED CONSOLIDATED INCOME STATEMENTS

(All amounts in thousands,except share data,or otherwise noted)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2022

2021

2022

RMB

RMB

USD

RMB

RMB

USD

Technology platform-based income

9,601,195

7,379,637

1,101,751

19,891,314

16,671,652

2,489,012

Retail credit facilitation service fees

9,193,711

6,912,248

1,031,971

18,858,856

15,612,092

2,330,824

Wealth management transaction and service fees

407,484

467,389

69,779

1,032,458

1,059,560

158,188

Net interest income

3,226,887

5,010,245

748,010

6,137,811

9,993,806

1,492,036

Guarantee income

890,589

1,936,139

289,058

1,441,964

3,838,473

573,069

Other income

1,070,812

532,002

79,426

2,109,368

1,235,577

184,467

Investment income

36,756

428,234

63,934

526,462

863,222

128,876

Share of net profits of investments accounted for

using the equity method

2,037

1,754

262

(27,846)

1,377

206

Total income

14,828,276

15,288,011

2,282,440

30,079,073

32,604,107

4,867,665

Sales and marketing expenses

(4,315,895)

(3,495,839)

(521,915)

(8,549,164)

(7,979,735)

(1,191,343)

General and administrative expenses

(797,573)

(761,940)

(113,755)

(1,651,278)

(1,487,481)

(222,075)

Operation and servicing expenses

(1,476,499)

(1,581,171)

(236,063)

(2,997,686)

(3,170,998)

(473,418)

Technology and analytics expenses

(516,828)

(483,385)

(72,167)

(963,421)

(931,268)

(139,035)

Credit impairment losses

(1,393,534)

(3,512,913)

(524,464)

(2,446,784)

(6,336,429)

(946,004)

Asset impairment losses

(2,049)

(351,956)

(52,546)

(2,546)

Finance costs

(275,974)

(221,279)

(33,036)

(560,066)

(432,071)

(64,507)

Other gains/(losses) - net

301,417

(526,718)

(78,637)

163,451

(408,691)

(61,016)

Total expenses

(8,935)

(10,935,201)

(1,632,583)

(17,006,997)

(21,098,629)

(3,149,942)

Profit before income tax expenses

6,351,341

4,352,810

649,857

13,072,076

11,505,478

1,717,723

Income tax expenses

(1,622,650)

(1,416,356)

(211,456)

(3,374,756)

(3,279,143)

(489,563)

Net profit for the period

4,728,691

2,454

438,401

9,697,320

8,335

1,228,159

Net profit/(loss) attributable to:

Owners of the Group

4,773,635

2,908,962

434,297

9,768,993

8,187,904

1,222,422

Non-controlling interests

(44,944)

27,492

4,104

(71,673)

38,431

5,738

Net profit for the period

4,159

Earnings per share

-Basic earnings per share

4.00

2.54

0.38

8.17

7.16

1.07

-Diluted earnings per share

3.72

2.46

0.37

7.59

6.73

1.00

-Basic earnings per ADS

2.00

1.27

0.19

4.09

3.58

0.53

-Diluted earnings per ADS

1.86

1.23

0.18

3.80

3.37

0.50

LUFAX HOLDING LTD

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands,or otherwise noted)

As of December 31,

As of June 30,

2021

2022

RMB

RMB

USD

Assets

Cash at bank

34,743,188

42,862,660

6,399,227

Restricted cash

30,453,539

25,333,802

3,782,237

Financial assets at fair value through profit or loss

31,023,211

21,433,047

3,199,870

Financial assets at amortized cost

3,784,613

5,485,415

818,951

Financial assets purchased under reverse repurchase agreements

5,527,177

1,509,259

225,326

Accounts and other receivables and contract assets

22,344,773

19,706,801

2,942,148

Loans to customers

214,972,110

236,591,969

35,322,251

Deferred tax assets

4,873,370

4,335,306

647,244

Property and equipment

380,081

332,665

49,666

Investments accounted for using the equity method

459,496

108,918

16,261

Intangible assets

899,406

894,951

133,613

Right-of-use assets

804,990

798,421

119,201

Goodwill

8,918,108

8,108

1,331,438

Other assets

1,249,424

2,348,549

350,629

Total assets

360,486

370,659,871

55,338,062

Liabilities

Payable to platform users

2,747,891

2,440,464

364,352

Borrowings

25,927,417

32,033,601

4,491

Current income tax liabilities

8,684

1,984,602

296,293

Accounts and other payables and contract liabilities

8,814,255

9,003

1,358,296

Payable to investors of consolidated structured entities

195,140

199,974,869

29,855,462

Financial guarantee liabilities

2,109

3,964,959

591,953

Deferred tax liabilities

833,694

1,013,871

151,367

Lease liabilities

794,544

809,298

120,825

Convertible promissory note payable

10,669,498

11,688,577

1,745,059

Optionally convertible promissory notes

7,405,103

8,051,587

1,202,070

Other liabilities

2,948

2,361,683

352,590

Total liabilities

265,874,283

273,421,514

40,820,757

Equity

Share capital

75

75

11

Share premium

33,365,786

28,533,060

4,259,874

Treasury shares

(5,560,104)

(5,642,769)

(842,443)

Other reserves

9,304,995

8,657,715

1,292,563

Retained earnings

55,943

64,130,847

9,574,483

Total equity attributable to owners of the Company

93,053,695

95,678,928

14,284,488

Non-controlling interests

1,508

1,559,429

232,817

Total equity

94,203

97,238,357

14,517,304

Total liabilities and equity

360,062

LUFAX HOLDING LTD

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands,or otherwise noted)

Three Months Ended June30,

SixMonths Ended June30,

2021

2022

2021

2022

RMB

RMB

USD

RMB

RMB

USD

Net cash generated from/(used in) operating activities

2,119,461

(1,034,772)

(154,487)

3,903,849

(2,736,994)

(408,622)

Net cash generated from/(used in) investing activities

(1,421)

6,048,599

903,032

(5,198,665)

12,943,660

1,932,438

Net cash generated from/(used in) financing activities

363,769

(6,577,441)

(981,986)

2,286,217

(7,302,588)

(1,090,248)

Effects of exchange rate changes on cash and cash

equivalents

(85,377)

24,535

3,663

(61,670)

2,358

352

Net increase/(decrease) in cash and cash equivalents

1,039,432

(1,539,079)

(229,778)

929,731

2,906,436

433,919

Cash and cash equivalents at the beginning of the

period

23,675,950

30,941,825

4,619,493

23,785,651

26,496,310

3,955,795

Cash and cash equivalents at the end of the period

24,715,382

29,402,746

4,389,714

24,714

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