Lexin Navigates Industry Headwinds with Prudent Strategy and Resilient Operations
Despite facing industry headwinds in late June 2026, Lexin has demonstrated its operational resilience through a series of decisive measures to mitigate the impacts on the company. In a second quarter earnings conference call held on August 31st, Chairman and CEO Jay Wenjie Xiao outlined the company's strategies for navigating these challenges.
Mr. Xiao emphasized that the industry operating environment had faced ongoing headwinds since the second quarter of 2026, with risk events involving certain peers triggering a widespread tightening and even suspension of funding supply across the industry. As a result, Lexin's loan facilitation operations were materially affected. To address these challenges, the company swiftly took several measures.
Firstly, Lexin drove cost efficiency to enhance resilience through market cycles by rapidly streamlining its organizational structure, optimizing headcount, and accelerating AI adoption. This resulted in reduced operating expenses and enhanced long-term sustainability. Secondly, the company tightened risk controls to maintain stable asset quality by scaling back overall loan volume and adopting a prudent approach to new loan originations.
Thirdly, Lexin strengthened financial discipline to enhance operational efficiency by prioritizing the recovery of receivables and security deposits, and driving a measured and steady scale down of facilitated loan balance. This safeguarded funding security and operational stability. Lastly, the company advanced its diversification strategy and accelerated business transformation in non-loan facilitation operations.
In terms of performance, Lexin achieved a loan volume of CNY 55.43 billion, generated revenue of CNY 3.19 billion, and net profit of CNY 101 million during the second quarter. While day one delinquency ratio picked up due to broader industry headwinds, the company's 30-day collection rate showed an improvement.
Notably, despite current industry volatility, Lexin remains confident in its long-term prospects. This confidence stems from the company's deep integration with consumption scenarios, which provides unique advantages for its e-commerce business. The business is expected to enjoy healthy growth going forward due to favorable policies and growing consumer demand. Furthermore, Lexin's fintech empowerment business serving corporate clients maintains rapid growth, achieving profitability in the second quarter.
Overall, Lexin has demonstrated a prudent strategy and resilient operations through navigating industry headwinds. The company's commitment to compliance, operational resilience, organic cash generation capability, and long-term safety and reliability provides assurance for its stakeholders.
