Australian fintech lender Plenti Group (ASX:PLT) has achieved record loan originations totalling $332 million over Q2 2023, which is 15% above the prior comparable period (PCP), and 20% above Q1 2023.

Of the $332 million, the company reports automotive loan originations were $174 million, which is 37% higher than Q1 2023, reflecting the continued adoption of Plenti’s commercial loan offering, along with the benefits of a ‘seasonally strong’ June.

Plenti says renewable energy loan originations were slightly higher than Q1 2023 at $36 million, but were 53% above PCP, while personal loan originations represented $122 million, which is an 8% increase above Q1 2023, and is supported by continue growth in Plenti’s director to consumer lending.

“We’re delighted to have delivered record quarterly loan originations”

The company reports net interest margins on new loan originations were negatively impacted in the last 6 weeks of the quarter by higher interest rate hedging costs, due to the ‘significant’ increase in market interest rate expectations and a corresponding increase in the yield curve. This increase in funding costs has largely passed through to average borrower rates.

Plenti reports annualised net losses for Q2 2023 were 117 basis points, reflecting increasing overall industry loss rates, but also the relative credit strength of its loan portfolio.

The company says 90+ day arrears were 49 basis points at the end of the quarter, increased from 42 basis points at the end of Q1 2023. Early stage arrears have also been relatively stable since February 2023, assisted by continual refinements being made to Plenti’s credit risk appetite and settings.

The loan portfolio weighted average Equifax credit score remained high at the end of the quarter, sitting at 830, compared to 831 at the end of Q2 2023.

In June 2023, Plenti completed a $406 million automotive loan ABS transaction, which increased the company’s ABS issuance to over $1.7 billion and refreshed capacity in its automotive warehouse facilities.

The company says its regular automotive asset-backed securities (ABS) issuance and the credit strength of its underlying receivables were supported by strong demand from both domestic and international investors.

Plenti also reports it continued to provide investors on its retail investors platform, the Plenti Lending Platform, with an ability to invest in notes issued as part its ABS transaction via the recently launched ‘Notes Market’.

As well as providing investors on the Plenti Lending Platform with access to higher investment returns and providing further diversity to Plenti’s ABS funding, the Notes Market has continued to release corporate capital, which has been invested to support growth in other funding structures.

Plenti reports it is on track to achieve its FY24 objectives, although the increase in interest rate hedging costs experienced in the second half of the quarter will impact profitability.

Cash NPAT is now expected to be around break even in the first half of FY24. The company reports it continues to expect robust growth in full year Cash NPAT, from the $4.5 million achieved in FY23.

Commenting on the quarter, Plenti Chief Executive Officer (CEO) Daniel Foggo said: “We’re delighted to have delivered record quarterly loan originations, as our priority moving into the new year has been to drive strong origination growth to help us maximise the economies of scale our technology-led model offers.

We achieved record monthly lending of over $130 million in June 2023 and we expect our differentiated customer experience to continue to attract healthy levels of demand across each of our three core lending verticals.”

Plenti is an ASX-listed fintech lender that provides automotive, renewable energy, and personal loans through its proprietary technology.