These lending stocks prove people still need loans during COVID
Lending stocks were among the biggest casualties during the COVID-19 market meltdown earlier in the year on investor fears of people tightening their belts or a rise in bad debts.
However, the recent FY20 financial results of three players tell a different story.
Last week Money3 (ASX:MNY) reported a $24.2m profit after tax and a 16 per cent increase in its gross loan book to $434m.
MoneyMe, which only listed on the ASX in December last year, reported a net profit of $1.3m. – marking a 300 per cent gain year on year.
The company also processed $179m in new loan applications, up 53 per cent year on year.
MoneyMe founder & CEO Clayton Howes told Stockhead he was proud of the year – noting his company expanded during the pandemic both in its product range and staff.
“It is a testament to high diversification, business models that allow for really smart credit decision [making] with contemporary information – it’s working,” he said.
Howes also saw significant opportunity ahead arguing his company was more innovative and agile to shift and meet consumer expectations.
“Where there’s no innovation we’re going to find opportunities. We started the year with one product…now we’ve got five products, tech-enabled with artificial intelligence decision making,” he said.
“And the banks are not going to keep up – when you’ve got 4 banks earning largely 90 per cent of the credit cycle here in Australia, it’s a phenomenal opportunity for innovation right now.”
MoneyMe shares rose 12.5 per cent this morning and are nearly 30 per cent up on their IPO price of $1.25.
Meanwhile, QuickFee, which operates a platform helping SME-focused accountants and lawyers get paid, booked a 47 per cent higher revenue of $8.5m.
And lending in Australia totalled $49.3m, a gain of 17 per cent.
CEO Bruce Coombes said the year ahead would see the company grow its presence in the US market.
In the last financial year, QuickFee made some inroads in America, lending $US13m ($18.1m), which was a 63 per cent increase.
“We are excited about the huge opportunity that the US represents and the progress we are making to become the preferred payment solutions provider for professional services firms in that market,” Coombes said.
QuickFee shares slid 9 per cent on Wednesday morning, but they are still well ahead of last years’ IPO price of 20c.