Non-bank lender MoneyMe returns to growth, delivers strong profit in FY24

MoneyMe returned to growth in FY24 with 23% rise in loan originations to $574m
NPAT rose by 85% in FY24 to $23m with operating costs falling by 7% to $48m
Secured assets now make up 55% of the loan book, which is up from 44% in FY23

Special Report: Non-bank lender MoneyMe has reported its FY24 results with a return to growth including a 23% increase in loan originations to $574m and NPAT up 85% to $23m with higher credit quality reducing credit losses.

MoneyMe (ASX:MME) ended FY24 with a larger and stronger loan book along with maintaining profits and increasing operating leverage as the company returned to growth.

MME said loan originations rose by 23% to $574m in FY24, indicating growth in H2 FY24, which is expected to continue in FY25.

The loan book grew by 6% to $1.2bn in FY24, from $1.1bn in FY23, which MME said was primarily due to an increase in secured car loan originations.

Secured assets now make up 55% of the loan book, which is up from 44% in FY23.

Credit quality improves

MME said the credit profile improved, with the average Equifax score rising to 763 as of June 20, 2024, up from 727 on the previous corresponding period (pcp).

Meanwhile, net credit losses reduced to 4.5%, from 5.8% in FY23, reflecting the shift to higher credit quality and secured assets.

Loan provisions fell to 4.7% for FY24 from 6.6% in FY23, in line with the improved credit profile and increased proportion of secured assets.

The organisation’s personal loan ABS transactions received two Moody’s credit rating upgrades, which it said reflected the strong performance of the underlying assets.

MME said revenue for FY24 fell 10% to $214m, aligned with a higher proportion of secured assets.

The company said a net interest margin of 10% was achieved for FY24, compared to 12% in FY23, despite a higher interest rate environment and the shift to secured assets.

Operating costs fall as MME optimised business for growth

MME said operating costs reduced by 7% to $48m in FY24, while the loan book grew by 6%, showcasing increased operating leverage from scale and technology advantages.

The operating cost-to-income ratio remained consistent with FY23 at 22%.

MME said it expanded its funding program in FY24, with the total funding capacity increasing to $1.7bn from $1.6bn in FY23, while achieving warehouse funding efficiencies that delivered margin benefits and releasing cash for growth.

The Autopay warehouse facility was extended and doubled from $375m to $750m to support future growth, as MME stated a continued focus on growing secured car loans in FY25.

MME said it expanded its product offering in FY24 to include secured car loans up to $150,000, opening new distribution channels and attracting high credit quality customers.

The company also launched a new mobile app with enhanced functionality during FY24, leading to an 11% increase in app usage after the launch.

Strong customer engagement, and attracting top talent

MME said its digital customer experiences and rapid customer service are driving strong customer loyalty and retention.

The lender said 73% of customer calls were answered within 10 seconds in FY24, saving customers’ time.

MME maintained above-benchmark customer satisfaction with a net promoter score of 69, and said 30% of its customers have 2 or more product.

More than 115,000 of users have accessed financial wellness support through MME’s free credit score tool since its launch.

The company also achieved Certified B Corporation status in August 2023, with a B Impact Assessment score of 91.2, well above the minimum 80-point threshold for certification.

MME said its purpose-driven culture continues to attract and retain top talent, with an overall employee engagement score of 81%, surpassing the 71% Australian benchmark.

More loan book growth in FY25

Managing director and CEO Clayton Howes said he was pleased with the company’s performance and results in FY24.

“With a 23% increase in new loan originations, we marked our return to growth and expanded the loan book to $1.2bn, while simultaneously improving its credit profile,” he said.

“Our shift to higher credit quality and secured assets has resulted in lower credit losses and, in turn, reduced our provisioning.

Howes said the company’s stronger statutory net profit after tax of $23m reflected its scale and technology advantages, healthy revenue, higher credit performance, and a realised deferred tax asset.

“Our relentless focus on innovation continues to drive operational efficiencies and strong customer satisfaction, while our B Corp Certification ensures we contribute to a more inclusive, equitable, and sustainable society,” he said.

“Looking ahead, we will continue to execute our strategy, extending our technology advantage, prioritising higher credit quality and secured assets, expanding our funding program for capital-efficient growth, and deepening our ESG impact,” he said.

“With this, we are confident that we will deliver loan book growth and profitable returns in FY25.”

This article was developed in collaboration with MoneyMe, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.