COVID-19 hasn’t impacted financial stocks as much as investors initially feared
As financial companies release their full-year results, it appears COVID-19 hasn’t been the doomsday it was feared to be.
However, personal lender and ASX small cap Money3 (ASX:MNY) today reported a $24.2m profit after tax and a 16 per cent increase in its gross loan book to $434m.
Money3 did see subdued lending volumes initially as it tightened lending criteria. But from late June these have begun to return.
The company was also a beneficiary of customers repaying loans faster, observing that cash collections for the June quarter were up 32 per cent prior to the corresponding period.
It said this improved cash flows considerably.
Large cap wealth manager and investment platform Netwealth (ASX:NWL), meanwhile, reported a net profit after tax of $43.8m, a 22 per cent increase compared to last year.
Funds Under Administration (FUA) rose by 35 per cent to $31.5bn.
Netwealth noted its transaction fee revenue was now 9 per cent of its platform revenue, tripling from only 3 per cent in FY19 due to increased trading volumes.
It also noted the average account size increased from $323,000 to $385,000 and the number of accounts rose by 10,380.
Netwealth shares gained 13 per cent this morning and are up 85 per cent in 2020.