So, over the next two to three years with investment in development, we believe this will become a profitable venture for us and I think, if you take the broader perspective of Lu Holdings, and I think if you look at the words that YS used today mentioned several times, diversification, so the focus really for the last two plus years in the current environment has been to derisk to reduce our exposure to the SBO segment, while focusing on the high quality customers and start to diversify our business in domestically with consumer finance, and also, I think through Hong Kong, with this full banking license that gives us long term opportunities in Hong Kong, Greater Bay, but also can be a launch point for other markets over time. So we look at it as an important and affordable option for us to continue to pursue diversification strategies.
Operator: Thank you. And our next question today comes from Yada Li with CICC. Please go ahead.
Yada Li: Hello, management. Thanks for taking my question. This is Yada from CICC. And I only have two questions for today. The first one is about our consumer finance segment. I was wondering how we shifted the strategic focus towards the consumer finance. And looking forward how much it will contribute to the whole loan book? And compare with the consumer finance peers, what are the unique advantages that we have to develop such business? And the second one is that I notice you have almost a RMB40 billion cash in bank as of this quarters end and we paid a normal dividend payout, where management consider a share repurchase or a special dividend to deliver more value to the shareholders. And that’s all. Thank you.
Gregory Gibb: Sure. I’ll take your first question on consumer finance. So I think we have to first define what is consumer finance for us? How does it add to what we already have been doing for many years? So if you look at our traditional focus on the small business owner segment, overtime, we’ve enabled lending to more than 6 million small business owners. And as you know, those loans have always been granted in the form of to the individual, mostly for use in their businesses. So actually, we have quite a large installed base of customers that we have interacted with and continue to interact with. Now, most of the lending that we have done traditionally has been larger ticket RMB200,000 to RMB300,000 and has typically been for a duration of two to three years.
With our consumer finance license, we have an opportunity to provide a higher frequency service to customers that we have served for many years. So we have the ability to understand those customers to understand beyond some of their longer term needs, particularly as they repaid over time, they may have shorter term requirements as individuals as well. And those requirements could be in form of consumption of their own personal needs. So we have been developing a product set that serves these individuals. We’ve also been developing a product set, which allows us to partner with a number of other online platforms, so that we’re also reaching out into new customer segments. Today, the business is developing around half with the ability to serve, small business owners and their individual needs.
And the other half through partnerships that extends our reach to the customer base. We continue to invest in this business to generate more and more scenarios, which are closely linked to customer’s consumption behavior. I think what’s very important if you look at consumer finance in the context of Lu Holdings, is that it increases our frequency of interaction for those customers we serve. It also gives us a broader dataset to understand some of their needs and behaviors, which allows us to better judge their overall credit risk in their various needs. So it’s an opportunity to leverage what we have to also broaden who we serve, to do it with a broader set of products with shorter durations, which gives us more flexibility and adds to data that we can use to assess customers more broadly.
Today, as we said in the third quarter of total new loan sales enabled through the company, about 40% were for consumer finance, it makes up about 11% of the total outstanding to-date. If you roll forward over the next 12 to 18 months, we would expect that it will still be a very large share of new sales and will increasingly make up a larger part of the portfolio. So we’re now low double digits in percentage of portfolio and we believe that will continue to increase over the next 12 to 18 months. So it is an important diversification initiative but it also helps reinforce our overall position in terms of customers and risk and service. David, you want to address the second question?
David Choy: Thanks, George. For your second question. Yes, we have been exploring all the ways to deliver value to our shareholders, very since our listing. As you may aware, we did some buybacks in previous years, and we continue to pay out dividends in recent years. We’ll continue to do so of course. And as you may aware, we just paid out the first half 2023 the dividends in October with an amount of about $89 million. It’s just a relatively small amount in terms of a relative to our cash position. And I think after all, we won’t exclude any means the ways that we can deliver value to our shareholders as a whole, full perspective of total shareholders returned. And we also find ways to preserve cash or deploy capital in a way to support the sustainable growth for business model in the future, or to create options for future business model and growth. Thank you, Yada.
Operator: Thank you. That concludes our question and answer session for today. I will now turn the call back over to our management for closing remarks.
Liu Xinyan: Sure. Thank you. This concludes today’s call. Thank you for joining the conference call. If you have any more questions, please do not hesitate to contact the company’s IR team. Thanks again.
Operator: Thank you. That concludes the call today. Thank you everyone for attending. And you may now disconnect.
