The lender also made strategic investments for long-term growth and increased its loan loss provision, CEO says
Prospa, which operates in Australia and New Zealand, has delivered total loan originations of $425.5 million for the first half ending, up 35.1% on the prior corresponding period (H1 FY22: $314.9m), with its NZ business contributing $93.3m for the half.
Loan originations included Prospa’s Small Business Loan, Business Line of Credit (including undrawn amounts), Back to Business loan, and Back to Business line (including undrawn amounts) in Australia and New Zealand.
The small business lending specialist’s total revenue increased 72.4% on pcp to $135.3m (H1 FY22: $78.5m), supported by a higher portfolio yield of 38.4%. Closing gross loans, meanwhile, were up 66.3% on pcp to $855.8m (H1 FY22: $514.6m).
Prospa also reported a 10.9% quarterly growth in active customers to 19,900.
Greg Moshal (pictured above right), Prospa co-founder and CEO, said the company strategically invested in new products and technology to support long-term growth as well as increased its loan loss provision in anticipation of further rate hikes and the slowing of economic growth.
“We have continued to invest in our products and technology so our customers have simple, stress-free, and seamless financial management tools, and they can focus on what they do best,” Moshal said. “Despite this increased investment, Prospa still posted an EBITDA profit for the half.
“The impacts of inflation, rising rates, and a tight labour market have increased uncertainty in the operating environments for many small businesses,” he said. “We are seeing stress in some of our lower risk grades and have revised our commercial credit risk assessment policies in-line with these changing conditions. Notwithstanding the macro environment and tightening credit, we continue to grow our business by meeting customer demand, building out our product roadmap, and applying a strong focus on our portfolio management settings.”
Adrienne Begbie (pictured above left), Prospa managing director New Zealand, commented on the NZ business’ increasing growth.
“Prospa’s commitment to innovation and customer service has clearly resonated with the New Zealand market, and as the company continues to expand its product offerings, we are well positioned to thrive in the dynamic and competitive lending landscape,” Begbie said. “However, whilst we’re proud to share Prospa’s strong performance, we are acutely aware that many Kiwi SMEs are facing some tough realities right now. Our customers are our number one priority, so we’re actively doing what we can to continue to provide support in meaningful ways that enable them to take care of their businesses."
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