Taxation (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Components of Group's (loss)/income Before Income Tax Expense

The components of the Group’s income before income tax expense for the years ended December 31, 2020, 2021 and 2022 are as follows:

	For the Year Ended December 31,
	2020			2021			2022
	(RMB in thousands, except for percentages)
Income before income tax expense		685,609			2,769,534			1,028,569
Income/(Loss) from non-China operations		15,143			(30,047	)		(94,806	)
Income from China operations		670,466			2,799,581			1,123,375
Income tax expense applicable to China operations		90,629			428,267			202,466
Income tax expense applicable to non-China operations		—			7,151			174
Total income tax expense		90,629			435,418			202,640
Effective tax rate for China operations		13.5	%		15.3	%		18.0	%
Effective tax rate for the Group		13.2	%		15.7	%		19.7	%

Schedule of Current and Deferred Portion of Income Tax Expense of Company's China Subsidiaries, VIEs, and Subsidiaries of VIEs

The following table sets forth current and deferred portion of income tax expense of the Company’s China subsidiaries, the VIEs, and subsidiaries of the VIEs:

	For the Year Ended December 31,
	2020			2021			2022
	(RMB in thousands)
Current income tax expense		594,149			831,675			169,299
Deferred income tax expense		(503,520	)		(396,257	)		33,341
Income tax expense		90,629			435,418			202,640

Schedule of Reconciliation Between Statutory EIT Rate and Effective Tax Rate for Group

The following table sets forth reconciliation between the statutory enterprise income tax (“EIT”) rate and the effective tax rate for the Group:

	For the Year Ended December 31,
	2020			2021			2022
Statutory EIT rate		25.0	%		25.0	%		25.0	%
Change of tax position*		(2.4	)%		—			—
Effect of tax holidays		(9.6	)%		(10.8	)%		(6.8	)%
Effect of non-deductible expenses		7.9	%		3.0	%		4.7	%
Effect of research and development tax credit		(6.8	)%		(2.1	)%		(6.1	)%
Changes in valuation allowance		(0.3	)%		0.1	%		0.6	%
Tax rate difference from statutory rate in other jurisdictions and others		(0.6	)%		0.5	%		2.3	%
Effective tax rates for the Group		13.2	%		15.7	%		19.7	%

* In the third quarter of 2020, RMB16.2 million income tax provision relating to 2019 was reversed as one subsidiary of the Group was certified to be qualified for using a preferential tax rate of 10% for 2019 annual tax clearance in this quarter.

Schedule of Effect of Tax Holiday Related to Group

The following table sets forth the effect of tax holiday related to the Group:

	For the Year Ended December 31,
	2020		2021		2022
	(In thousands, except per share amount)
Tax holiday effect		66,110		299,578		69,827
Basic net income per share effect		0.18		0.81		0.20
Diluted net income per share effect		0.16		0.72		0.18

Schedule of Components of Deferred Tax Assets and Deferred Tax Liabilities

Deferred income tax expense reflects the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the deferred tax assets are as follows:

	For the Year Ended December 31,
	2021			2022
Deferred tax assets
- Deferred guarantee income and other accrued expenses		832,412			807,224
- Contingent guarantee liabilities		232,210			220,527
- Provision for credit losses		646,460			948,177
- Advertising expenses in excess of deduction limit		178			5,683
- Net operating loss carryforwards		21,919			43,237
Less: valuation allowance		(6,756	)		(13,038	)
Total deferred tax assets		1,726,423			2,011,810
Net deferred tax assets		1,176,878			1,141,761

The components of the deferred tax liabilities are as follows:

	For the Year Ended December 31,
	2021		2022
Deferred tax liabilities
-Contract assets and service fees receivable		523,752		636,659
-Guarantee receivables		80,128		285,949
Total deferred tax liabilities		603,880		922,608
Net deferred tax liabilities		54,335		52,559

Schedule of Movement of Valuation Allowance

	For the Year Ended December 31,
	2020			2021			2022
Balance at beginning of the year		(6,662	)		(4,429	)		(6,756	)
Additions		(2,243	)		(2,659	)		(6,783	)
Reversals		4,476			332			501
Balance at end of the year		(4,429	)		(6,756	)		(13,038	)