ASX-listed fintech lenders Plenti & Wisr show car lending is a good place to be

ASX listed fintech lenders are beginning to release their financial reports for the December quarter and the picture looks positive.

When COVID-19 hit, investors feared COVID-19 would lead to collapsed demand for credit products generally, wide-scale defaults (or both) and that ASX fintech lenders would pay.

But all stocks have survived and the first two companies in this sector reported that their most recent quarter was a record. Furthermore, one of the most significant drivers for both stocks was growth in car loans.

One example is Plenti Group (ASX:PLT) which told shareholders today it made loan originations of $130.9 million and its total loan portfolio reached $508 million.

This marked six straight months of record loan originations and was particularly driven by automotive lending – this was up 273 per cent from the prior corresponding period.

While loan deferrals had seen a slight rise due to COVID-19, this quarter saw levels revert back to what they were pre-COVID – 0.44 per cent.

“With our strong capital position, leading technology, market leading credit and growing momentum across each part of our business, the outlook for the fourth [FY21] quarter and the rest of 2021 is very positive,” declared CEO Daniel Foggo.

While Plenti was one of the more disappointing IPOs, shares are up over 20 per cent in the last month.

Plenti (ASX:PLT) share price chart

Wisr gains too

Also among ASX fintech lenders, Wisr (ASX:WZR) released its financial update yesterday.

It too saw record new loan origination growth of $83.8 million, which is a 165 per cent increase on the prior corresponding period.

Although Wisr did not credit car loans as a big driver of this figure, it did note that a recently launched secured vehicle loan product was “delivering strong initial results” and would reap rewards going forward.

The company also credited that it attracted “the best borrowers in Australia” – namely those with high credit scores.

“Our new secured vehicle product has also significantly increased the total addressable market for Wisr,” said CEO Anthony Nantes.

“Combined with our differentiated business model, consumer proposition, technology platforms and funding capability, we’re in prime position to continue to aggressively grow our new loan originations, with significant room to scale in the second half of the year and beyond.”

Wisr’s shares have seen a modest recovery since COVID-19 but are still in the red over the last 12 months.