Lufax downgraded to Hold as losses narrow but revenue falls and credit costs stay high

Lufax Holding Ltd has been downgraded from Buy to Hold due to mixed financial results. While the company's net losses significantly narrowed in the second quarter of 2026 thanks to cost cuts and operational efficiencies, its revenue declined by 16% year-over-year. Additionally, the credit cost ratio remains high at 10.4%, and shareholder distributions have been paused, signaling caution for investors. The downgrade reflects uncertainty about Lufax's near-term growth and profitability despite some operational improvements.