Plenti’s loan portfolio grows to $1.44 billion
ASX-listed Plenti Group have provided a trading update for the quarter ended 30 June 2022 (Q1 FY23), where their loan portfolio (Plenti’s key driver of revenue) has increased to $1.44 billion at 30 June 2022, 90% above the prior comparable quarter (PCP) and 11% above prior quarter.
In addition to this growth, Plenti’s quarterly loan originations were $289 million, up 34% on PCP, and revenue came in at $30.5 million.
Commenting on the quarter, Daniel Foggo, Plenti’s Chief Executive Officer, said, “Plenti has delivered yet another strong quarter, driving substantial loan portfolio growth, further diversifying funding, and continuing to deliver Cash NPAT profitability.
“The strength of our business model has allowed us to increase loan yields to offset changes to funding costs to deliver another quarter of positive Cash NPAT.
“Plenti continues to deliver technology and customer experiences to differentiate our offerings and achieve our mission of building Australia’s best lender.”
Loan originations
Total loan originations were $289 million, up 34% on the PCP. Total loan originations were 10% lower than the prior quarter as, consistent with statements made in its FY22 results presentation, Plenti prioritised increasing yields on new loan originations and business profitability over absolute loan origination volumes.
Automotive loan originations increased 42% on PCP but were lower than the prior quarter as Plenti was an early market mover in increasing its borrower rates to help offset higher funding costs on new loan originations. Renewable energy loan originations increased 15% on PCP and were broadly flat on prior quarter, while personal lending increased 27% on PCP, and was up 9% on prior quarter.
Loan originations were supported by the deployment of several significant technology and operational improvement projects, driving continued improvements to Plenti’s market leading customer experiences.
Loan portfolio funding and margin improvement
Plenti completed a $437 million automotive ABS transaction in June, which increased its total ABS issuance over the last year to over $1 billion, and freed capacity in each of Plenti’s two automotive warehouse facilities.
Plenti has previously noted that, like other lenders, it has experienced increases in funding costs on new loan originations, principally this calendar year. While margins were impacted for several months as the market adjusted, Plenti has now increased its borrower rates to largely offset these higher funding costs. The chart below shows Plenti’s weighted average net interest margin on new loan originations for the last three quarters.
