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Auswide Bank has announced that it has completed the divestment of its stake in personal loans P2P lender MoneyPlace, just two years after acquiring its first stake in the platform.
While the details of the sale are confidential, the bank said that it expects the sale of its 62 per cent stake to have “a one-off positive impact on full financial year results”, with an expected net profit after tax (NPAT) contribution of approximately $1.1 million.
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Auswide Bank said that it will continue to utilise the MoneyPlace platform to originate consumer finance business and grow its consumer lending book, and it expects to continue to grow its income from its personal loan investment into MoneyPlace.
The bank first acquired a 19.3 per cent equity stake in MoneyPlace in January 2016, while also committing funding to the Melbourne-based P2P lender’s consumer lending program. It increased its stake in the lender in February 2017, giving it a controlling interest.
However, the bank has said that now the time is “right” to divest.
Speaking earlier this month, Auswide Bank’s managing director, Martin Barrett, said: “We are pleased to have supported MoneyPlace to establish itself as a P2P lender in Australia. However, now is the right time to realise our investment.
“Our relationship with MoneyPlace demonstrates the ways fintechs and traditional lenders can work together, and has allowed Auswide Bank to achieve an uplift in loan originations through nontraditional channels. We look forward to continuing to work with MoneyPlace going forward.”
Auswide Bank’s business performance is now expected to result in a half-year profit after tax of $8.0 million, an increase of approximately 10 per cent on last year.
After normalising for discontinued operations, on the sale of the equity stake in MoneyPlace, underlying NPAT is expected to be $8.4 million, increasing by approximately 15 per cent, subject to the half-year audit process.
Half-year results are expected to be announced on 23 February 2018.
Mr Barrett said that “while the market remains competitive and regulatory requirements have influenced growth in the sector, we have been pleased with our progress in the first half of the 2018 financial year”.
“As we have previously disclosed,” the managing director said, “the second half of the 2018 financial year provides Auswide Bank with improved loan growth opportunity. This is particularly the case for investor lending capacity, which significantly increases based on the organisation’s regulatory cap profile.”
[Related: Broking in the age of fintech]
