Qfin Holdings' Q2 2025: Unraveling Contradictions in Consumer Loan Demand, Risk Management, and Funding Strategies

Consumer loan demand and risk management strategy, consumer loan demand and credit risk management, funding costs and ABS issuance, loan volume and risk management strategy are the key contradictions discussed in Qfin Holdings' latest 2025Q2 earnings call.



Financial Performance and Growth:
- Qfin Holdings reported a non-GAAP net income increase of 30.8% year-over-year to RMB 1.85 billion, with non-GAAP EPADS on a fully diluted basis rising by 48.8% to RMB 13.63.
- The growth was driven by improvements in operational efficiency and strategic focus on high-quality growth.

Risk Management and Credit Quality:
- The leading risk indicator FPD over 7 days for new loans facilitated in June decreased by about 5% compared to May.
- This improvement was achieved through tight risk standards and optimization of risk control and asset distribution strategies.

Asset-Backed Securities (ABS) and Funding Cost Reduction:
- Qfin issued approximately RMB 7.8 billion in ABS during Q2, representing a year-on-year increase of about 70%.
- The increase in ABS issuance led to a funding cost reduction of an additional 10 basis points sequentially, and the company expects further reductions in 2025.

User Acquisition and Platform Expansion:
- Total new credit line users grew 40% year-over-year to RMB 1.79 billion, while the number of new borrowers increased by approximately 60% to 1.23 million.
- This was due to the implementation of a user-centric strategy and the expansion of embedded finance through partnerships with various Internet platforms.