Commenting on the quarter, Daniel Foggo, Plenti’s Chief Executive Officer, said: “We’re delighted to have delivered record quarterly loan originations, as our priority moving into the new year has been to drive strong origination growth to help us maximise the economies of scale our technology-led model offers.
“We achieved record monthly lending of over $130m in June 2023 and we expect our differentiated customer experiences to continue to attract healthy levels of demand across each of our three core lending verticals.”
Loan portfolio ($m)||30 June 2022||20 June 2023||Growth |
Plenti’s loan portfolio, which is a key driver of revenue, increased to $1.90 billion at 30 June 2023, a 32% increase from 30 June 2022 ($1.44 billion) and an 8% increase from 31 March 2023 ($1.77 billion). The automotive loan book reached the milestone of $1 billion in April 2023.
Loan originations and margins
Loan originations for the quarter totalled $332 million, 15% above the prior comparable period (PCP) and 20% above prior quarter.
Automotive loan originations were $174 million, 37% above prior quarter, reflecting the continued adoption of Plenti’s commercial loan offering as well as the benefits of a seasonally strong June. Renewable energy loan originations were $36 million, slightly above the prior quarter but 53% above PCP. Personal loan originations were $122 million, 8% above the prior quarter, supported by the continued growth in Plenti’s direct to consumer lending.
Net interest margins on new loan originations were negatively impacted in the last 6 weeks of the quarter by higher interest rate hedging costs, due to the significant increase in market interest rate expectations and a corresponding increase in the yield curve. The increase in funding costs has now been largely passed through to average borrower rates.
Annualised net losses for the quarter were 117 basis points, reflecting increasing overall industry loss rates but also the relative credit strength of Plenti’s loan portfolio.
90+ day arrears were 49 basis points at the end of the quarter, up from 42 basis points at the end of the prior quarter. Early-stage arrears have been relatively stable since February 2023, assisted by continual refinement of Plenti’s credit risk appetite and settings.
The loan portfolio weighted average Equifax credit score remained high at 830 at the end of the quarter, versus 831 at the end of the prior quarter.
Plenti completed a $406 million automotive loan ABS transaction in June 2023, which increased its total ABS issuance to over $1.7 billion and refreshed capacity in its automotive warehouse facilities. Plenti’s regular ABS issuance and the credit strength of its underlying receivables supported strong demand from both domestic and international investors.
Plenti continued to provide investors on its retail investor platform, the Plenti Lending Platform, with an ability to invest in notes issued as part of its ABS transactions via the recently launched ‘Notes Market’. As well as providing investors on the Plenti Lending Platform with access to higher investment returns and providing further diversity to
Plenti’s ABS funding, the Notes Market has continued to release corporate capital, which has been invested to support growth in other funding structures.
|Growth||-Drive solid growth in loan originations and loan portfolio-Grow revenue to over $200 million
Deliver robust full year Cash NPAT growth, skewed towards 2H24
|Efficiency||-Reduce cost-to-income ratio to <30%-Remain on target to deliver $25m in efficiencies as loan portfolio scales towards $3 billion
Plenti is on track to achieve its FY24 objectives, although the increase in interest rate hedging costs experienced in the second half of the quarter will impact profitability. Cash NPAT is now expected to be around break even in 1H24. Plenti continues to expect robust growth in full year Cash NPAT, from the $4.5m achieved in FY23.