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Sydney-based lender Wisr has reported $186 million in new loan originations (pcp) and overall protected its net interest margin (NIM).
Non-bank lender Wisr has continued its “path to profitability” given the company's 1Q23 results released Wednesday (26 October), it has announced.
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For this period, it had continued to lift its pricing to protect Net Interest Margin (NIM) and confirmed demand for its lending products had delivered $186 million in new loan originations - a 41 per cent increase on Previous Corresponding Period (pcp).
Additionally, arrears had also decreased from 0.98 per cent to 0.89 per cent, while operating revenue had grown by 75 per cent on pcp, it explained.
The role of broking in achieving its quarterly success had not been lost on the company, highlighting the importance of the industry for its objectives to The Adviser.
Wisr chief commercial officer and head of Broker, Peter Beaumont, said: “We've built our business focussed on the broker channel since launching in 2015, and the Wisr team works especially hard to help brokers build their businesses using our products.”
“Having built many partnerships across the broking community to become a leading provider of personal loans and secured vehicle loans, we are dedicated to supporting brokers to get great outcomes for their clients.”
According to the company, highlights of the 1Q23 results – which Wisr will present at the Goldman Sachs Annual Emerging Technology Conference this week – included:
- Its prime loan book (warehouse, securitised and balance sheet) now at $885 million, an increase of 86 per cent on pcp (1Q22 - $475 million), with arrears at 0.89 per cent (4Q22 - 0.98 per cent) and average credit score of 790;
- Quarterly revenue up to $21.2 million, a 75 per cent increase on 1Q22 ($12.1 million) and a 20 per cent increase on 4Q22 ($17.6 million);
- 1Q23 loan originations of $186 million was a 41 per cent increase on 1Q22 ($132 million) and a “slight increase” [total loan originations (cumulative, to scale)] on 4Q22 ($186 million);
- $1.4 billion in total loan originations as at 30 September 2022;
- It was well capitalised with a cash balance of $74.8 million, including unrestricted cash and cash equivalents of $18.6 million as at 30 September 2022; and
- The Wisr Financial Wellness Platform passed 682K profiles (35 per cent growth on pcp), with 35,000+ profiles added in 1Q23.
The path to deliver profitability
Wisr chief executive officer Mr Anthony Nantes said: "As we continue to lift our pricing to protect our NIM, demand for our lending products has delivered $186 million in new loan originations for the quarter, a 41 per cent increase on pcp.”
“Our arrears have decreased from 0.98 per cent to 0.89 per cent - a great indicator of the true quality of our loan book and its ability to perform through a cycle - and we’ve grown operating revenue by 75 per cent on pcp, demonstrating the high quality of our credit assets and credit decisions.
"Making prudent material reductions in operating costs, pivoting to a moderate growth trajectory and continuing to protect our margins has put us on the path to deliver profitability in the short term while protecting the business from any sustained economic downturn.
“We also know that prime loan books, like Wisr's, have traditionally performed well through credit cycles; combined with the framework already in place to manage credit quality through the cycle, Wisr is in the strongest position to navigate market conditions whilst delivering a continued growth trajectory," concluded Mr Nantes.
As outlined in an official ASX release, Wisr explained that, “the benefits will largely be realised in the coming quarters and are estimated to result in a 15 per cent reduction in 2Q23 operating expenses versus 4Q22.”
Strategy driving the reduction in arrears
Wisr has outlined its framework to manage credit quality through the cycle, including the bespoke Wisr Score, early warning account data indicators and collection process investment all making an impact.
The company’s credit decisions and products are, “prime-skewed to bank-grade customers,” it stated.
Its prime loan book has the company well prepared to navigate current market conditions, combined with the framework already in place to manage credit quality through the cycle, it explained.
The controls it used include:
- Early warning indicators;
- Bespoke Wisr Score, which provides a more accurate view of a customer’s financial standing and optimises risk-adjusted return;
- Increased use of digital data with automated rules around account conduct;
- Credit policy changes with a greater hindsight review of historical arrears tightening credit in line with risk appetite; and
- Ongoing investment in Wisr’s collection processes.
[Related: Wisr originations, loan book more than double over FY22]
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