Aug. 18 at 6:56 PM
$LU On August 13, 2025, China announced a new interest subsidy program where the central government covers 90% of a 1 percentage point interest rate reduction on qualifying consumer loans (typically up to RMB 50,000, or around US
$7,000). This effectively lowers borrowing costs for consumers while protecting bank profit margins from being hit. Local governments cover the remaining 10%.
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Why This Matters for Lufax
Lufax lacks substantial direct exposure to the interest rate margin war:
The subsidy is handled via government budgets, not by financial intermediaries or platforms like Lufax, meaning the costs of subsidized loans aren’t borne by Lufax.
State-owned banks remain largely responsible for implementation, helping them preserve their interest margins—this indirectly helps Lufax by reducing competitive pressure on loan pricing.
