LexinFintech Profit Soars 52% Amid China's Regulatory Overhaul

SHENZHEN, China – March 19, 2026 – LexinFintech Holdings Ltd. (NASDAQ: LX) announced a striking 52.4% year-over-year increase in full-year net profit for 2025, reaching RMB1.7 billion (approx. US$240 million). The results underscore the company's resilience and strategic adaptation in a year defined by a complex macroeconomic environment and the full implementation of a new, stricter regulatory framework for China's fintech industry.

While navigating these headwinds, the technology-empowered personal financial service enabler reported a full-year operating revenue of RMB13.15 billion, a 7.4% decrease from 2024. However, the significant profit growth, coupled with a booming e-commerce division and a robust commitment to shareholder returns, paints a picture of a company successfully pivoting toward a more sustainable and diversified business model.

Navigating a New Regulatory Landscape

The fourth quarter of 2025 was a pivotal period for LexinFintech, marking what CEO Jay Wenjie Xiao described as an “important transition” in adapting to the new regulatory framework. This overhaul, driven by Chinese authorities to de-risk the financial sector and protect consumers, introduced significant changes. A key mandate was the capping of comprehensive interest rates for all new loans at 24%, a rule LexinFintech strictly adhered to, leading to a drop in the weighted average APR of its new loans.

This proactive compliance, while impacting short-term top-line figures, is part of a long-term strategy. The company's fourth-quarter operating revenue fell 16.8% year-over-year to RMB3.04 billion, and loan originations decreased by 3.8% to RMB50.0 billion. Mr. Xiao noted that these disciplined efforts enabled the company to “secure a stable transition, while balancing business scale and overall asset quality.” Management believes this regulatory consolidation will ultimately favor compliant, leading platforms with prudent risk management, a category where LexinFintech aims to solidify its position.

E-commerce Surge Provides Strategic Counterbalance

A standout performer in LexinFintech's 2025 report was its installment e-commerce platform, which served as a powerful engine for diversification and growth. The platform's Gross Merchandise Volume (GMV) surged by an impressive 110% year-over-year, reaching RMB7.62 billion for the full year. This segment, which served over 480,000 users in the fourth quarter alone, has become a crucial component of the company's ecosystem.

CFO James Zheng highlighted that the “resilience of our diversified business ecosystem provided an effective counterbalance” to the pressures felt in the core lending business. The e-commerce division demonstrated not just growth but also increasing efficiency. Even as the company adopted a more prudent operational strategy in Q4, the segment's gross margin improved significantly to 7.8%, a near 3-point increase from the previous quarter. This integration of finance with daily consumption scenarios provides a stable, alternative revenue stream and deepens customer engagement, proving to be a differentiated advantage during a period of industry adjustment.

A Disciplined Approach to Risk and Growth

Amid what the company termed “heightened industry risk volatility,” LexinFintech's risk management came under the microscope. The 90-day+ delinquency ratio saw a slight uptick to 3.1% as of December 31, 2025, compared to 3.0% at the end of the third quarter. However, this metric reflects a challenging period for the entire sector following the regulatory changes.

Company data suggests that credit risk indicators peaked in October 2025 before beginning a steady decline through the end of the year and into early 2026. This improvement was attributed to a disciplined approach that included intensifying the identification of high-risk customers and leveraging AI for weekly iterations of its risk models. In the fourth quarter, the company fortified its balance sheet with ample provisioning to weather the volatility. Simultaneously, LexinFintech successfully reduced its funding costs, which fell to 3.8% in the fourth quarter, strengthening its foundation for future growth.

Bolstering Shareholder Confidence

LexinFintech made a strong statement of its commitment to shareholder value. The company's board approved a dividend of US$0.188 per ADS for the second half of 2025, representing 30% of the net income for the period. This follows a previous dividend hike, more than doubling the total payout for 2025 compared to the prior year.

This commitment was further reinforced through direct action in the market. The company has repurchased approximately US$39 million of its ADSs under an ongoing buyback program. In a significant vote of confidence, CEO Jay Wenjie Xiao also completed his previously announced personal purchase plan of US$10 million worth of the company’s ADSs. In his statement, Mr. Xiao affirmed, “We will continue to explore various avenues to deliver sustainable value to our shareholders.”

Looking ahead, the company remains cautious. While risk metrics are improving, LexinFintech projects that total loan origination for the first quarter of 2026 will remain flat in light of “ongoing macroeconomic uncertainties.” This prudent outlook reflects a company that has successfully weathered a significant storm and is now positioning itself for steady, high-quality development in China's reshaped fintech industry.