X Financial's Q2 2025: Navigating Strategic Contradictions in Loan Growth, Asset Quality, and AI Integration

Loan growth and asset quality strategy, asset quality and loan growth prioritization, use of artificial intelligence for process improvement, AI integration for cost efficiency, and capital return strategy are the key contradictions discussed in X Financial's latest 2025Q2 earnings call.



Strong Revenue and Loan Growth:
- X Financial reported total net revenue of RMB 2.27 billion for Q2 2025, reflecting 17.3% sequential growth and 65.6% year-over-year growth.
- The growth was driven by increased loan origination volumes and the expansion of loan facilitation services.

Improved Asset Quality:
- The company's 31- to 60-day delinquency rate improved to 1.16% as of June 30, down from 1.29% a year ago, reflecting a near 10% improvement year-over-year.
- This improvement was due to disciplined borrower screening, rigorous underwriting practices, and proactive borrower engagement initiatives.

Share Repurchase and Capital Return:
- X Financial repurchased an aggregate of approximately 16.7 million Class A ordinary shares, including approximately 2.3 million ADS, under its share repurchase plans.
- The ongoing share repurchase activity reflects the company's confidence in its financial position and commitment to returning capital to shareholders.

Regulatory Compliance and Strategic Growth:
- X Financial remains committed to aligning with the evolving regulatory environment in China, focusing on responsible lending practices and consumer protection.
- The company's strategic growth outlook emphasizes asset quality and profitability over volume growth, reflecting a cautious approach in the face of regulatory uncertainties.