It also records massive loan growth
As market-leading fintech consumer lender Plenti enjoys record loan growth, it’s also celebrating the completion of a $250 million funding deal with Westpac to offer finance for electric vehicles.
Plenti, which provides a wide range of loans including personal, automotive and renewable energy loans, has just released its trading update for the quarter ended December 31, 2021 (Q3 FY22).
It reveals remarkable growth, with loan originations of $307.6 million, up 135% on the prior corresponding period (PCP) in 2020, and 20% higher than the previous quarter. Plenti’s loan portfolio has increased to $1.1 billion, a 118% rise over the PCP, and 21% above the last quarter.
Car loans have grown 25%, renewable energy loans are up 8% and personal loans rose 16% against the prior quarter and increases of 160%, 105% and 108% respectively over PCP.
“We are very proud of the results we’ve delivered,” said Plenti CEO Daniel Foggo (pictured above). “We’ve consistently grown quarter on quarter for the last couple of years and to see that actually as we scale there’s no loss in those growth rates and that momentum is extremely pleasing.”
Westpac has also just announced the completion of a $250 million structure auto facility with Plenti to fund electric vehicles (EVs) and related features, such as recharge equipment.
“The electric vehicle market in Australia is reaching a pivotal time and we are proud to partner with Plenti to develop a dedicated green auto finance program which focuses on growing the adoption of electric vehicles in Australia,” Westpac Institutional Bank executive director structure finance Craig Parker, (pictured immediately above) said.
While EVs in Australia are a small percentage of the automotive market (around 1.57%), EV sales are growing with a 26% increase in the first six months of 2021 compared to the whole of 2020, according to the federal government.
“Westpac is committed to supporting our clients in responding to the challenges of climate change through innovative and sustainable financing solutions, and this (Plenti) transaction is another example of the bank’s commitment to be at the forefront of sustainable finance in Australia,” Parker said.
Foggo said Plenti is delighted to have secured Westpac as a senior debt funder, to support its entry into the fast-growing market and it looks forward to helping more Australians become EV owners.
“We’ve obviously built a strong and growing presence in automotive finance, we’ve also got a strong household renewable business,” Foggo said.
“We’re the largest funder of home batteries in Australia. We run two government programs – one in South Australia and one in NSW to provide subsidies for people buying home batteries, so it was a very natural thing for us to try and bring those two parts of our business together to focus on electric vehicles.”
Plenti has designed a loan offering tailored to EVs and one of the features is a 50-basis point discount compared to traditional automotive loans because the lender had access to lower funding rates.
“We’ve also got some additional features like the ability to top up your loan to pay for things such as charging equipment and software upgrades,” he said.
Looking at Plenti’s overall loan growth, brokers have been crucial.
“Brokers are extremely important to us – the vast bulk of our originations are through broker partners, that includes our automotive lending where 90% of our originations are through broker partners, particularly as second-hand car prices have gone up,” Foggo said.
The personal loan business has been particularly strong over the last quarter.
“We have been able to help brokers build their business – it means we’re getting a greater share of the personal loan volumes through our broker partners.
“They’ve really valued the speed that we deliver, the fairness of the terms of our loans, the consistent credit policy and the relationships that our broker team has built with them.”
Foggo said Plenti works with more than 10,000 mortgage brokers who are offering car and personal loans to their clients and he’s pleased that these numbers continue to grow.
“The technology and the processes that we can now offer our broker partners means that they can be remunerated really well for the effort they have to put in to provide their customer base with these types of loans,” he said. “Particularly for mortgage brokers, it’s a good time to think about further diversifying their income.”
After launching a commercial automotive loan in May 2020, Plenti is now rolling out to more asset finance brokers with around 80% of brokers having access to the product at the start of December.
“It was the first loan that was a digital experience from end to end … we also simplified any early repayment fees and made it a much fairer loan offering, so I think they are two of the key things that have resonated with our broker partners,” Foggo explained.
Commercial loan originations doubled in the last quarter compared to the previous quarter.
Plenti also recently launched loans to help people who going through a divorce.
“We’re trying to give brokers a really broad suite of products to help their customers.’
The COVID pandemic has had little impact on Plenti’s business.
“We know that new cars are still being delivered, that people are still buying second-hand cars so we’re reasonably immune to COVID because even if it impacts the broader market we can still grow by growing market share,” said Foggo.
