Benzinga | Nov 4, 2020 05:34AM EST

Lexinfintech Holdings Released Statement Regarding Draft of Interim Measures for Administration of Online Microcredit Business; Said Lexin's Operating Model Does Not Rely on Co's Online Microcredit Subsidiaries

LexinFintech Holdings Ltd. ("Lexin" or the "Company") (NASDAQ:LX) today released a statement regarding the draft of the Interim Measures for the Administration of the Online Microcredit Business jointly issued by the China Banking and Insurance Regulatory Commission and the People's Bank of China on November 2, 2020 (the "Discussion Draft").

The Company noted that according to the Discussion Draft, microloan companies will be subject to heightened restrictions with respect to risk management, qualification of joint lending or loan facilitation partners and use of credit enhancement services, among others.

Lexin's operating model does not rely on the Company's online microcredit subsidiaries, which accounted for less than 1% of Lexin's loan financing as of October 31, 2020. The Company therefore does not expect the Discussion Draft to have any material impact on Lexin's financials, operations or business model.

"After a careful review of the Discussion Draft, we have concluded that the current version of Discussion Draft will have limited impact on our operations and our business model," said Mr. Jay Wenjie Xiao, Lexin's chairman and chief executive officer. "Our business model does not rely on our licensed microcredit subsidiaries, and hence we do not expect any material impact or major changes to our business. We continue to be fully confident in our business model as we conclude the year and enter 2021."

"Online microcredit funding accounts for less than 1% of our loan financing and can easily be replaced by other sources," said Mr. Craig Yan Zeng, Lexin's chief financial officer, "The Discussion Draft represents potential regulations that are in the draft stage, and we will continue to closely monitor the regulatory environment so as to proactively prepare for potential regulatory changes and minimize the potential risks to our shareholders."

The above represents Lexin's current and preliminary view based on the current version of the Discussion Draft, which is subject to changes and uncertainties. New rules, interpretations and/or clarifications and other developments by legal and regulatory authorities may also be adopted or announced in the future, requiring the Company to re-evaluate its position then.