Wisr returns to pre-COVID-19 loan origination levels
Wisr announce that the company has returned to pre-COVID-19 loan origination levels. Wisr’s rapid response to COVID-19 conditions, and exceptionally low exposure to high-risk COVID-19 sectors, has seen new loan originations grow 48% in May 2020, compared to April 2020. Customer support requests have also returned to pre-COVID-19 levels.
Mr. Anthony Nantes, Chief Executive Officer, Wisr said, “In May, we achieved the milestone of the highest weekly settled loan volume in the Company’s history and have now surpassed pre-COVID-19 origination levels. This is an exceptional validation of our fintech business model, proprietary technology, and high-performance culture.”
“By rapidly responding to COVID-19 economic conditions in Q3FY20, and taking a prudent approach to loan origination in Q4FY20, we have continued to responsibly lend to our customers to help them consolidate, refinance, purchase, and fulfil their needs through the Wisr Ecosystem in these uncertain times, ” finished Mr. Nantes.
Secured Vehicle launch
Wisr was poised to launch the Secured Vehicle product to market in Q4FY20 as planned. As widely reported, the entire auto sector experienced significant disruption in April and May due to COVID-19 social distancing measures, including inability of buyers to inspect vehicles. To maximise the impact of this exciting new product launch, the launch will now proceed in Q1FY21 across all channels.
COVID-19 SUPPORT AND ARREARS UPDATE:
During the period 1 March to 31 May 2020, Wisr provided 395 customers (5.8%) with COVID-19 related relief packages, consisting of short-term (three month) payment deferrals. Interest on the outstanding principal during the full or partial deferral periods will be capitalised, in line with industry standard.
The volume of requests for support has now returned to pre-COVID-19 levels, with only two requests in June 2020 to date. To ensure customers credit reports are not adversely impacted, no repayment history information will be reported to credit bureaus for customers on a COVID-19 related payment deferral.
As at 31 May, $10.3 million or 6.7% of total portfolio loan balances are on a COVID-19 related payment deferral. This includes $3.4 million from the Wisr Warehouse, which represents 5.0% of the Wisr Warehouse portfolio balance. These loan deferral rates compare favourably to industry-wide deferral rates for residential mortgages (10%1) and SME business loans (14%1).
Applying the industry standard arrears treatment, to hold all COVID-19 loans on a payment deferral at the arrears position at the month end prior to entering the payment deferral, 90+ arrears are at 1.62% for the total portfolio and 0.21% for the Wisr Warehouse as at 31 May 2020, which is well below internal risk appetite and Wisr Warehouse parameters. This treatment is approved by funders and aligns to guidance from APRA for ADI’s.
Wisr continues to proactively reach out to customers on a COVID-19 payment deferral arrangement to understand their circumstances. Results have been encouraging to date with 52% of respondents indicating a return to normal payment schedule at the end of the assistance period, or earlier.
Mr. Anthony Nantes, Chief Executive Officer, Wisr said, “To ensure Wisr grew safely and maintained our market-leading credit performance through COVID-19, in Q3FY20 we tightened our credit policy while retaining our customer-centric approach to responsible lending. Our key origination and risk metrics are showing that Wisr’s purpose-led model is driving growth and revenue in line with risk appetite and above management expectations.”
“We expected a period of heightened customer hardship stemming from COVID-19. However, this impact has been very manageable in light of the Company’s very small balance sheet loan exposure, prime customer base and exceptionally low exposure to high risk sectors. We are now back to pre-COVID-19 levels for customer support requests.”
“Throughout this time, the Company has worked closely with our Wisr Warehouse funders who are very supportive of Wisr providing customers with COVID-19 relief, including agreeing for arrears triggers to not be impacted by such relief provision. Wisr appreciates the significant support provided by its funders during the COVID-19 disruption.”
“Our purpose-led and agile fintech business model has Wisr well-positioned for growth through COVID-19 disruptions and post-recovery, setting the Company up for a strong revenue growth trajectory over the coming quarters,” finished Mr. Nantes.
1. According to E&P Australian Major Banks Report, 2 June 2020