• Record quarterly loan originations of $321.9 million, 87% above prior corresponding period (PCP) and 5% above prior quarter (despite usual seasonal impacts)
• Loan portfolio increased to $1.3 billion at 31 March 2022, 111% above PCP and 17% above prior quarter
• Inaugural renewable energy and personal loan asset-backed securities (ABS) issued, substantially reducing funding costs across $280 million of receivables
• Corporate debt facility secured, providing cost effective, flexible and non-dilutive funding of ongoing loan portfolio growth
• Profitability guidance upgraded in March, when an expectation of positive Cash NPAT for FY22 was announced, reflecting strength of loan portfolio growth and technology-led operating leverage
• Exceptional credit performance maintained and 90+ day arrears of 26 basis points at 31 March 2022
Commenting on the record quarter, Daniel Foggo, Plenti’s Chief Executive Officer, said:
“Plenti has delivered another outstanding quarter, achieving record loan originations, driving substantial loan portfolio growth, reaching significant funding milestones, and upgrading its guidance to reflect Cash NPAT profitability for the year.
“I am incredibly proud of the Plenti team for its relentless focus on delivering faster, fairer loans to our customers, while continuing to drive towards our mission of building Australia’s best lender.
“We are excited about the year ahead, with our team focused on leveraging our proprietary technology to execute our program of product innovation and efficiency initiatives, whilst continuing to profitably take market share in each of our three key lending verticals.”
Record loan originations
|Loan originations||Q4 FY21||Q4 FY22||Growth|
January and February loan originations were robust although reflected usual seasonal impacts, whilst a new monthly record of $124.6 million in loan originations was achieved in March, driven by record automotive and personal loan originations. Renewable energy finance originations were impacted throughout the quarter by elevated levels of rainfall in Queensland and New South Wales which restricted household solar and battery installations.
This strong loan origination growth was achieved while maintaining credit quality. The weighted average Equifax credit score for new borrowers during the quarter was 847, above the portfolio weighted average score of 832 at the end of December 2021.
Substantial loan portfolio growth
|Loan portfolio||31Mar 21||31Mar 22||Growth|
Plenti’s loan portfolio increased to $1.3 billion at 31 March 2022, up 111% from 31 March 2021 ($615 million) and up 17% from 31 December 2021 ($1,107 million).
Exceptional credit performance maintained
Plenti maintained its exceptional credit performance during the quarter, underpinned by its proprietary credit decisioning and pricing technology and supported by data it has derived from funding over 100,000 loans since it commenced lending in 2014.
Annualised net losses for the quarter were low at approximately 42 basis points, reflecting the prime nature of Plenti’s borrowers.
90+ day arrears were 26 basis points at the end of the quarter.
Loan portfolio funding
Plenti completed a $280 million ABS transaction in February, which substantially reduced funding costs on the underlying receivables and freed capacity in Plenti’s renewable energy and personal loan warehouse facility.
Pricing of the ABS was supported by $65 million of the notes being green-certified under the Climate Bonds Standard, and 76% of the notes being rated Aaa by Moody’s. The transaction also reduced Plenti’s equity funding requirement for the underlying receivables, releasing capital back to the business to fund further loan portfolio growth.
Growing expectations of central bank rate increases meant Plenti experienced increases in funding costs on new loan originations during the quarter. Higher funding costs on new loan originations have been partially mitigated through increases in borrower rates. Plenti expects borrower rates to continue to increase over coming months as the market adjusts to higher funding costs.
Corporate funding position enhanced
As announced on 18 March, Plenti has entered into a corporate debt facility agreement with an Australian funder to provide capital to support its ongoing business growth. The facility limit is linked to the size of Plenti’s securitised loan portfolio, providing the ability to access more capital in-line with loan book growth.
The facility was initially drawn to $18 million.
Full year results
Plenti intends to release its full-year results on Wednesday 18 May 2022.
All numbers in this release are preliminary and unaudited. This release was approved by the Plenti board of directors.