LexinFintech Holdings Ltd reported a 49.7% sequential decline in net income to RMB 101 million for the second quarter of 2026, as tighter funding conditions and higher credit costs weighed on profitability.
Total revenue remained roughly flat at RMB 3.19 billion, while total net revenue from credit and installment e-commerce fell 21.1% sequentially to RMB 1.3 billion. Loan origination volume declined 4.3% to RMB 55.43 billion, with fintech-enabled loans contributing 45% of the total, up 8% from the prior quarter.
Credit business net revenue dropped 32.5% to RMB 981 million, driven by a 43.6% decline in capital-heavy credit facilitation service income to RMB 508 million. Tech empowerment service income, which is capital-light, fell 14.4% to RMB 473 million. Installment e-commerce net revenue increased 58.7% to RMB 329 million, with gross margin expanding to 14.1% from 9.4%.
Operating expenses decreased 17.6% sequentially to RMB 1.2 billion, reflecting lower sales and marketing spending. Credit costs rose 9.6% to RMB 1.4 billion, while the gross provision ratio for new capital-heavy loans stood at 7.8% and the provision coverage ratio was 230%.
Management warned of a net loss in the third quarter of 2026, citing tight funding conditions, lower revenue, higher credit costs, and one-time restructuring expenses. The company also shifted to an annual dividend policy to preserve liquidity during industry adjustments.
Lexin’s cash position stood at approximately RMB 2.5 billion, with shareholders’ equity at RMB 12 billion. The 90-day-plus delinquency ratio edged up to 3.6%, while day-1 delinquency rose 9.5% sequentially.
Shares fell 17.54% to $0.973 in premarket trading after the results, extending a decline from a 52-week high of $6.31.
