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The SME lender’s total originations fell during the quarter as it maintains a tight risk appetite.
ASX-listed small-business lender Prospa Group Limited (Prospa) has said total originations for the quarter ended 31 March 2024 (3Q24) were $159.3 million, down 7.8 per cent on the same period last year ($172.8 million).
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The lender said the drop in total originations was reflective of its maintained “cautious risk appetite”.
Prospa’s closing gross loans were $822.1 million for the quarter, down 7.7 per cent on the previous corresponding period’s figure of $890.4 million, while total revenue decreased by 7.3 per cent to $69.3 million, driven by the reduction in the lender’s portfolio.
The trading update said that Prospa successfully reduced operating expenses across “all functions to further streamline the cost base” while also continuing to execute on its technology replatforming program.
This includes uplifting its digital experience across lending and transactional products, Prospa said.
Co-founder and chief executive of Prospa, Greg Moshal, said that early arrears are “trending within acceptable levels” as alternations in the lender’s risk setting continue to take effect.
“More mature arrears remain elevated and we are working with those customers on revised payment arrangements as required,” Moshal said.
“We retain two focus areas in relation to the loan book – managing credit performance on the existing loan book while attracting premium grade customers.
“Our technology re-platforming investment demonstrates our continued investment in delivering better digital experiences for our customers and partners and our long-term commitment to the business.”
The lender said it continues to take proactive measures to address credit performance in specific customer segments as macro-economic uncertainty persists.
Latest ABS transaction
Prospa announced on 5 April 2024 the pricing of a $200 million ABS offering (its third ABS so far) to wholesale investors that was supported by a pool of small-business loans and line of credit facilities.
Moshal said on the transaction: “In relation to our funding, we were pleased to receive strong support from a range of investors for our third ABS solidifying our position as a reliable issuer in this important funding market.”
Acquisition
This quarter saw the lender announce that it has entered into a scheme implementation deed that will see a consortium led by the Salter Brothers Tech Fund acquire 100 per cent of the ordinary shares in Prospa.
Shareholders will have the opportunity to vote on the scheme and the iPartners Funding at meetings anticipated to be held in July 2024. If approved, the scheme is slated to be implemented by August 2024.
[RELATED: SMEs expect decrease in turnover: Prospa]
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