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The digital lender has reported a fall in originations as it shifted its business strategy to tighten credit criteria to moderate risk and “moderate growth to focus on profit delivery”.
MONEYME delivered its first-half results for 2023 to the end of 31 December 2022 (1H23), reporting $242 million in new loans to a total value of $1.24 billion.
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These results marked a 45 per cent decline in originations compared to the same period in the year prior, where it reported $441 million in new loans to a value of $590 million.
It also comes off record results in the second half of 2022, where it reported $674 million in originations to a value of $1.35 billion.
According to MONEYME, the drop in originations come as a result of a change of strategy to preserve its cash balance and reduce funding requirements given the changing economic environment.
MONEYME’s head of sales, Julian Antonescu, said it came in line with its near-term business strategy to focus on profit delivery and reduce credit risk.
However, the results noted a 180 per cent increase in the average loan book from $461 million in the first half of 2022, to $1.3 billion in first half of 2023, delivering significant revenue.
Overall, the lender ended the first half of FY23 with $9 million in net profit after tax (NPAT) and noted the impact the rising interest rates and recessionary concerns were having on its loan book.
The results followed a 300-bp increase to the cash rate, taking it to 3.1 per cent at the end of December 2022, which is now tipped to reach 4 per cent according to three of the four major banks’ economists.
Mr Antonescu commented; “We saw broker engagement rising quickly in FY22, thanks to our fast servicing times and 60 minute settlements. It’s an important distribution channel for us and we are focussed on nurturing and maintaining these relationships even during this period of slowed growth,” Mr Antonescu said.
“We see strong credit demand building in the economy, particularly for personal loans and car loans, and once we are ready to enter our next growth phase, our broker network will be important.
“In the near-term, we are focusing on improving our offering and broadening the range of products available to brokers, maintaining our high customer satisfaction that is well above the big four banks, and further streamlining the application process. This includes further automation of the broker and client journey to allow brokers to focus more on building client relationships, and less on admin.”
Speaking about the results, managing director Clayton Howes was pleased to say that the group’s shift from high growth to profit delivery has been swift and disciplined, achieved through proactive cost optimisation, prudent credit risk management, and customer pricing adjustments.
“Our recent pilot launch of a new consumer-facing feature for Autopay, Autoscan, is set to transform the car buying experience by giving the end customer control and visibility of their financing options,” Mr Howes said.
“Looking ahead, we are optimistic about the future of our industry and see significant potential for growth in all our key verticals, particularly in auto financing.”
The group’s loan provisions remained unchanged at 6.1 per cent compared to the second half of 2022, reflecting reduced risk and increased provision buffers for the higher-risk environment.
The group’s continued integration of digital lender SocietyOne continued ahead of schedule, resulting in the culmination of SocietyOne’s new business flows onto the Horizon platform during the first half.
MONEYME reported the acquisition delivered more than $20 million of cost savings.
The transaction, which was backed by a $25m syndicated facility agreement with PEP, was completed 15th March 2022.
[Related: MoneyMe gains $25million funding for SocietyOne deal]
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