Ping An-Backed Lufax Hedges on Whether It Will Quit P2P
Yang Qianwen
DATE:  Jul 19 2019
/ SOURCE:  yicai
Ping An-Backed Lufax Hedges on Whether It Will Quit P2P Ping An-Backed Lufax Hedges on Whether It Will Quit P2P

(Yicai Global) July 19 -- Lufax, a fintech giant under China's Ping An Insurance Group, said it is making changes at its peer-to-peer lending business to comply with government measures aimed at reining in the sector after a report claimed the firm would call time on its P2P interests.

Lufax's products and its customers' rights will remain unaffected, it told Yicai Global, without giving an unequivocal intention to quit or remain in the troubled P2P lending sector. The Shanghai-based company runs its lup2p online lending platform via a subsidiary.

Reuters reported yesterday that Lufax plans to shutter its once-core P2P business and apply for a consumer finance license instead because of its inability to register with local authorities under rules in place since 2016 in a move to pave the way for a listing. Lufax, officially known as Shanghai Lujiazui International Financial Asset Exchange, last year shelved plans to go public in Hong Kong amid uncertainty over consumer credit regulation, Reuters cited three sources as saying.

In recent years, the P2P market has come under the ever-stricter watch of the powers that be. The government measures Lufax referred to are known as the 'three cuts' and are designed to reduce loan volumes and thin out the number of lenders and borrowers in the P2P field.

Some 650,000 persons had lent and 1.47 million had borrowed money on Lufax's lup2p site as of June 30. Some 1.56 million loans worth CNY98.4 billion (USD14.3 billion) were in default, with an interest balance of CNY9.1 billion, while 56,000 loans worth CNY2.1 billion were overdue, data shows.

P2P used to be Lufax's sole interest, and its peer-to-peer platform was effectively its persona. The company handed over the business to wholly owned Lufax Internet Financial Information Services at the end of 2016, and the parent firm became an open platform for financial products, though the trading volume of its P2P products had ranked first in China.

China's private e-loan sector has two main regulators, the Leading Group of Internet Financial Risks Remediation and the Leading Group of Online Lending Remediation, which said at a joint meeting earlier this month that they will properly address the loan volume risk in the online lending sector, supporting and assisting institutions to exit the sector or shift their focus in an orderly manner.

Editor: Ben Armour

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Keywords:   Ping An Insurance,Lufax,P2P