Qfin Cuts Funding Costs via ADS, Lowers Loan Pricing 80bps, Boosts Risk Metrics
QFIN•Qfin faced liquidity pressure but cut funding costs by boosting ADS proportion in its funding mix. The company lowered average loan pricing by 80 basis points sequentially, improved its C2M2 risk ratio by 17%, and increased spending on high-quality user acquisition by 40% while maintaining a strong capital base.
1. Liquidity and Funding Cost Reduction
Qfin faced pressure in the funding market but lowered funding expenses by increasing the share of American Depositary Shares (ADS) in its funding mix, enhancing liquidity flexibility and reducing overall cost of capital.
2. Strategic Loan Pricing Adjustments
The company cut average loan pricing by 80 basis points sequentially through targeted pricing aimed at higher-quality borrowers, improving retention and encouraging repeat borrowing while preserving credit standards.
3. Risk Management and Capital Strength
The C2M2 risk ratio fell 17% sequentially in Q1, reflecting model iterations and optimized risk strategies; management expects stable or improving risk metrics in subsequent months while maintaining a robust capital base to support growth and shareholder returns.
4. Focus on High-Quality User Acquisition
Qfin reallocated marketing spend, boosting investment in high-quality customer segments by 40% using advanced acquisition channels like FIDS; this disciplined approach emphasizes ROI and long-term asset health over pure volume growth.
