humm group’s push for growth though the buy now pay later segment resulted in significant loan losses in 2019/20 but the company’s latest results indicate that it is getting its credit quality issues under control.

humm released unaudited figures from its 2020/21 accounts yesterday, showing net loan losses (gross write-offs net of recoveries) as a proportion of average net receivables fell from 4.1 per cent in the June quarter last year to 3.5 per cent in the June quarter 2021.

This included net losses to receivables in the BNPL division falling from 6.3 per cent to 4.4 per cent over the same period.

The company said it was getting the benefit of its investment in “a scalable credit origination engine”.

It said it expects to report a cash profit of A$68.4 million for the year, an increase of 121.1 per cent over the previous year.

Second half cash profit was lower than the first half, which the company said was due to its spending on platforms, marketing and people as it enters the United Kingdom, where it launched at the end of June, and Canada.

Group transaction volume rose 8 per cent to $2.7 billion over the year to June. The strongest growth came from the commercial and leasing division, whose transaction volume rose 56 per cent to $540 million.

The buy now pay later segment was the biggest contributor, by transaction volume, with volume growing 31 per cent to $1.03 billion.

The Australian cards and New Zealand cards businesses both suffered falls in transaction volumes.

Total customer numbers grew 20 per cent to 2.7 million. The company signed up 1362 new merchants in the June quarter.