After a string of record results and after smashing its target of a $1bn loan book, Plenti says it’s streaking away with the leadership position amongst a busy field of tech lenders.
ASX-listed fintech lender Plenti Group (ASX:PLT) just seems to keep pulling further away from its competitors after delivering yet another record quarter.
The consumer fintech lender reported record quarterly loan originations of more than $307 million for Q3 of FY22, a massive 135% above the prior corresponding period (PCP), and – again – 20% above the prior quarter.
Plenti to come
The company’s loan portfolio has now surpassed the $1 billion mark, increasing to $1.1 billion at 31 December 2021, 118% above PCP and 21% above Q2 FY22.
Reaching $1bn consumer loan portfolio was always going to be a formality for Plenti, as it assumes the leadership position amongst fintech lenders – becoming the first to reach the milestone.
The company has previously declared its ambitions of reaching $5bn by 2025, and with a current run-rate of over $100 million a month, that goal is a realistic target.
“I’m excited by the strong momentum across the business and outlook for 2022, as we deliver faster, fairer loans to our partners and customers and continue on our mission to build Australia’s best lender,” says Plenti’s CEO, Daniel Foggo.
Plenti in Q3
Record loan originations were achieved in each of the company’s three lending segments.
Once again, the automotive lending segment has proved to be its lynchpin. This segment gained 25% in the quarter to $178.6m in new loans, and has grown by 160% since last year’s corresponding quarter.
The rapid growth in auto-lending reflects gains in market share, driven by the company’s investments in technology and the continued strengthening of its sales and distribution capabilities.
Plenti of time
Growth in the auto segment was also supported by the rollout of its commercial automotive loan offering to additional broker partners, as well as the launch of its suite of EV (electric vehicle) finance products and tools last November.
The personal loans segment is catching up fast, and was up 16% quarter-on-quarter to $101m.
Plenti of growth
Plenti says the continuing growth in the personal lending segment is testament to the strengthening demand for personal loans in general, as well as the fruits of Plenti’s multi-channel customer reach.
The company has been increasing its active broker base to over 200 new broker partners, leveraging its technology-led broker offering and industry relationships.
Meanwhile, Plenti’s renewable energy loan segment saw an increase of 8% from the previous quarter to $28 million, despite solar and battery supply constraints during the period.
The growth in this segment has mainly been driven by increased finance penetration with existing and 50 newly accredited merchant partners.
Plenti of space
In this space, Plenti has also successfully executed its strategy of partnering with large energy retailers, having entered into a partnership with Energy Australia and recently being appointed by AGL to provide interest-free finance to its residential solar and battery customers.
Overall, Plenti’s group portfolio saw a new monthly record of $112 million new originations in November, with a strong loan origination run-rate maintained in December until the seasonal slowdown of the Christmas holiday period.
“The Plenti team has delivered another outstanding quarter, achieving strong growth in each lending vertical and further demonstrating the strength of our credit capabilities,” says Foggo.
Credit performance maintained
Plenti was able to achieve its strong loan origination growth while maintaining credit quality.
The weighted average Equifax credit score for new borrowers during the quarter was 840, above the portfolio weighted average score of 828 at the end of September 2021.
The company says this has been made possible by its proprietary credit decisioning and pricing technology, which holds a massive amount of data derived from funding over 100,000 loans worth $2 billion since 2014.
The loan books’ annualised net losses for the quarter were approximately a low 50 basis points, reflective of the attributes of Plenti’s loan portfolio and strong underlying borrower characteristics.
The books’ 90+ day arrears also improved, and were 20 basis points at the end of the quarter, down from 26 basis points at 30 September 2021.
Strong funding
To support the rapid growth, Plenti established a second automotive warehouse facility in December, with Westpac as senior debt funder and the CEFC providing mezzanine finance.
This facility, which has an initial limit of $250 million, includes an EV-specific tranche, which is structured to provide preferential and highly efficient funding for electric vehicles.
“We are delighted to have secured Westpac as a senior debt funder to support our strategic entry into the rapidly growing electric vehicle market, and look forward to helping more Australians transition to EV ownership,” Foggo said.
The new warehouse facility complements the funding depth and diversity the company already has in place, as it works towards completing a renewable energy and personal loan ABS (asset based security) transaction in Q4 FY22.
The company says the ABS transaction could potentially reduce its funding costs even further, as advanced discussions with another funding partner also continues apace.
Plenti is well funded and its balance sheet is strong, with corporate cash of $29.3 million at 30 September 2021.
This article was developed in collaboration with Plenti Group, 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.