X Financial Q1 Operating Margin Hits 12% as Loan Originations Plunge 58%
XYF•X Financial saw loan origination tumble 58.4% year-over-year to RMB14.63 billion in Q1 2026, while active borrowers fell 60.6%. Despite revenue declining 39.3%, operating margin surged to 12% from 1.4% by cutting costs, though net income plunged to RMB37.9 million from RMB458.1 million.
1. Loan Origination and Borrower Base Declines
In Q1 2026, loan origination volume fell to RMB14.63 billion, a 58.4% year-over-year drop, while the active borrower base contracted by 60.6%, reflecting reduced customer engagement and tighter acquisition strategies.
2. Margin Recovery and Income Decline
Total net revenue declined 39.3% to RMB1.18 billion, yet operating margin improved to 12% from 1.4% in Q4 2025 through cost management; net income collapsed to RMB37.9 million from RMB458.1 million in Q1 2025 due to higher credit provisions.
3. Risk Management and Capital Return
The company tightened underwriting criteria, bolstered compliance infrastructure and expanded process automation to prioritize credit quality, and continued its share repurchase program, while noting ongoing regulatory uncertainties in China could pressure future profitability.
