Plenti Group reports strong revenues on the back of $2b loan portfolio

Consumer lender Plenti Group (ASX: PLT) has cited an increased loan portfolio as the key to its strong financial performance for the three months to end September.

The portfolio — which is a key driver of revenue — increased to $1.99 billion, representing a 29% increase from the previous corresponding period and a 5% increase on the June quarter.

The company’s loan portfolio hit $2 billion in the first week of October.

Loan originations

Loan originations for the quarter totalled $292 million, or 9% above the same time last year and 12% below the record loan originations achieved in the previous quarter.

Automotive loan originations were $154 million (up 10% on last year) but down from the June quarter which benefited from strong commercial loan originations at the end of the financial year.

Renewable energy loan originations reached a record $40 million (up 39% on last year) and 12% above the June quarter, supported by continued market adoption of Plenti’s GreenConnect renewable energy platform.

Personal loan originations were $98 million, down 2% on last year and 19% on the June quarter, reflecting refinements in Plenti’s credit appetite which has been driven by its focus on delivering stable credit outcomes.

Net interest margins remained stable, with margins on new loan originations in the quarter slightly above the average portfolio net interest margin and offset by incremental costs from funding facility changes.

Quarterly arrears

Plenti’s 90+ day credit arrears were 45 basis points at the end of the quarter, down from 49 basis points at the end of the June quarter.

Early-stage arrears continued to be stable, reflecting resilience in broader consumer credit and assisted by the continual refinement of Plenti’s credit risk appetite and settings.

Annualised net losses for the quarter were 82 basis points, supported by the sale of certain written-off or defaulted loans, while annualised net losses were 107 basis points, down from 117 points in the previous quarter.

Plenti’s loan portfolio weighted average Equifax credit score remained high at 832 at 30 September, compared to 830 at the end of June.

Credit priority

Chief executive officer Daniel Foggo was pleased with the company’s quarterly results.

“Evidencing stability in credit performance was a priority for this quarter, so it has been pleasing to deliver net annualised credit losses of below 1%, further demonstrating our capabilities in credit underwriting and loan portfolio management,” he said.