Consumer lender Plenti put the brakes on its personal lending business as the pandemic took hold but has been able to maintain growth with higher volumes of less risky automotive and renewable energy loans.
Following its initial public offering and listing on the ASX in September, Plenti (formerly RateSetter) has released its first financial report, covering its results for the six months to September 2020.
The company made a loss of A$6.6 million for the half, compared with a loss of $7.4 million or the previous corresponding period.
It presented its results on a pro forma basis, adjusting for IPO costs and COVID subsidy payments. On that basis, interest income for the half was $23.9 million – an increase of 31 per cent over the previous corresponding period. Revenue was ahead of prospectus forecast.
Funding costs rose by almost as much – up 28 per cent to $12.3 million on the back of a bigger loan book. General and administrative expenses rose 37 per cent to $6.1 million.
The loan impairment expense fell 31 per cent to $3 million. That included an $852,000 increase in the expected credit loss provision. The ECL provision stands at $10.7 million – 2.5 per cent of the loan portfolio.
The loan book, which is made up of personal loans, auto loans and renewable energy loans was worth $435 million at the end of September.
A highlight was record loan origination of $167 million – up 33 per cent on the previous corresponding period and 6 per cent ahead of prospectus forecast.
Auto loan originations accounted for $81.1 million, compared with $19.2 million in the previous corresponding period; renewables accounted for $28.5 million, compared with $19.4 million previously; and personal loans accounted for $57.4 million – down from $86.6 million.
Borrowers paid an average interest rate of 12.1 per cent and Plenti’s average funding rate was 6.3 per cent.
The average interest rate was down from 13.3 per cent, reflecting the change in the mix to more auto and renewable energy loans, which are lower risk than personal loans.
The average funding rate was down from 7.1 per cent, reflecting the lower cost of the company’s new automotive loan warehouse.
On the credit quality side, the annualised net loss rate was 1 per cent of loans funded.
Plenti was established in Australia in 2014 as a peer-to-peer lender. It still offers peer-to-peer lending but it has a more diversified funding based these days, including banks, superannuation funds and other institutional investors, the Clean Energy Finance Corporation and a warehouse backed by a major bank.