Lufax, one of China's largest online wealth managers with $55 billion in assets, is reportedly exiting peer-to-peer lending, its original business, due to regulatory challenges.
This follows Lufax's decision to delay its float in Hong Kong which it originally planned for the first half of 2018. The firm is believed to have struggled to meet P2P regulatory requirements after authorities tightened rules in 2017 to manage risks.
This includes the reporting of the flow of funds between various parties and accounts, online deposits and having an accounting system with well-defined and standardized fund deposit clearing.
Hopeful For Smoother IPO
Lufax, formerly Shanghai Lujiazui International Financial Asset Exchange, is valued at about $39.4 billion and Ping An Insurance was reportedly seeking to buy back $12 billion in shares in June, signaling confidence.
It is not known when Lufax will exit peer-to-peer (P2P) lending or how the business will be unwound, said a «Reuters» report, but a pursuit of a consumer banking license in underway. The move is expected to address investor uncertainties and pave the way for a stronger IPO.
Lufax was founded in 2011 as a P2P lending platform and it quickly grew to become one of China’s largest online wealth management platforms with $54 billion in assets under management.
