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ASX non bank lenders are taking market share away from traditional lenders. Picture Getty Images
With record results, ASX non-bank lenders are chipping away at traditional players
July 14, 2021 | Eddy Sunarto
Over the last few years, the burgeoning non-bank lending sector is taking market share away from traditional lenders, and has kept rising to new heights.
According to data, there are now more than 600 non-bank lenders in Australia, which make up 7% of all debt financing in the country.
Given they're not burdened with regulatory capital requirements of traditional banks, these companies are more nimble and can operate at a much lower cost base.
As earnings season goes under way, we've seen these ASX-listed non-banks reporting record results once again.
Yesterday, Plenti Group (ASX:PLT) delivered yet another record quarter, after strong results in the past two financial years, and is now on track to hit $1 billion in loan originations.
Plenti's strength is in automotive lending, where it commands 2% of the Australian market.
The company booked a 260% increase in loan originations for the quarter, which hit a record $216.4 million, with the auto segment making up around half of the total book.
Today, another non-bank lender, Harmoney (ASX:HMY), also posted record results.
Founded in 2014, Harmoney is a NZ-based lender that has originated around $2 billion in personal loans across Australia and New Zealand (ANZ). In Australia, it uses the Libra platform to make credit decisions and approvals.
Harmoney reported a strong second half today, with total new originations up by 144% compared to the first half, to NZ$250m. The company also delivered its largest ever month of originations in June of NZ$53m.
The HMY share price rose by 8% on the news.
Other ASX non-bank lenders
FSA Group (ASX:FSA)
Another non-bank lender to make an announcement today was the FSA Group. The 20-year old company helps Aussies with debt, including insolvencies and bankruptcies.
It announced today that Westpac Bank has renewed its $350 million non-recourse senior home loan facility.
FSA has been working to restructure its business to reduce costs, and believes demand for its services will pick up once all government subsidies and support for COVID have been withdrawn.
The FSA share price has risen by 23% over the past 12 months.
Money 3 (ASX:MNY)
The company has not released its latest earnings, but has flagged an upgrade to its full-year profit guidance.
The automotive finance company said its FY21 profit is set to surpass previous estimates, and is expected to come in at $38 million, following a strong second half.
Prospa (ASX:PGL)
Prospa reported a strong third quarter, with loan originations up by 20% on prior quarter, to $121 million.
The company focuses in the small business lending market within ANZ, and has just surpassed $2 billion in lending to these businesses.
PGL shares are up by 27% in the past 12 months, but the stock remains well off its IPO listing price.
Wisr (ASX:WZR)
Wisr is a personal lender operating in the Australian market, and has delivered 19 consecutive quarters of loan growth, on track for a $1 billion loan book.
The company has just raised $50 million in an oversubscribed placement and share purchase plan (SPP), which will be used to grow its loan portfolio, as it enters the automotive lending space.
MoneyMe (ASX:MME)
MEE reported record originations of $57m in May, and is experiencing significant traction in its newly launched secured vehicle finance innovation, Autopay.
Autopay has generated $1.3m in originations within the first 6 weeks of launch.
MoneyMe says it can approve application within five minutes by using its artificial intelligence-powered Horizon Technology Platform to assess a user's loan application.
The MME stock price has more than doubled in the past 12 months.
Resimac (ASX:RMC)
Resimac is the oldest of all the listed non-bank lenders, having started business in 1985.
The company focuses on the home loans market, with more than $2 billion in settlements in the first half.
Resimac delivered NPAT of $50.5m for the half, an 86% increase on pcp, and is set for a strong full year result.
The RMC share price has risen by 135% in 12 months.
Pepper Money (ASX:PPM)
Pepper Money is the latest non-bank lender to publicly list, making its debut on the ASX in May this year.
With a market cap of more than $1 billion, the company has been operating for over two decades – originating $32 billion in loans (home loans, asset finance and commercial real estate loans) mostly across Australia.
The PPM share price has dropped to $2.59, after floating at $2.89.
Share prices today:
At Stockhead we tell it like it is. While Plenti and MoneyMe are Stockhead advertisers, they did not sponsor this article.
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ASX: PPM Pepper Money
ASX: HMY Harmoney Corp
ASX: PLT Plenti Group
ASX: MME MoneyMe
ASX: MNY Money3
ASX: WZR Wisr
ASX: PGL Prospa
ASX: RMC Resimac
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