Wisr loan originations down 71% in 4Q23

In a trading update for the three months to 30 June 2023, the personal lender noted that its strategy to moderate loan growth had resulted in it originating $53 million, a 62 per cent fall on the previous quarter’s originations of $140 million and a 71 per cent drop on the $186 million originated in 4Q22.

As detailed in 2Q23, the lender has been working to “deliberately moderate loan origination growth to maintain balance sheet strength and prioritise profitability”.

The moderation of loan origination volume was “deemed prudent” due to the continued monetary tightening from the Reserve Bank of Australia (RBA).

Wisr stated in its report that this was done to maintain balance sheet strength through a clear capital management strategy, a focus on profitability, and the adoption of a “broadly conservative stance” until market conditions stabilise.

To date, the non-bank lender has written a total of $1.6 billion in loans. Its loan book as of 30 June was $931 million (up 19 per cent on the prior comparative period).

In addition, Wisr’s 90+ day arrears increased slightly by 1.25 per cent, partly driven by the loan book decrease.

The non-bank lender stated the small lift in arrears continued to demonstrate “the high quality of Wisr’s prime loan portfolio”.

The lift in arrears is still “within risk appetite” and is reflective of broader macro-economic conditions, according to the non-bank lender.

Wisr’s net write-off figure for the quarter represented 0.48 per cent of the loan book, at $4.5 million, remaining the same as the previous quarter.

The higher loss rate for the second half of the financial year (Q3 and 4Q23) is in line with expected seasonality, the lender stated, which can also be seen last year in Q3 and 4Q22.

As well as working to moderate loan book growth, the lender also reduced its net operating costs, including by reducing headcount, to focus on profits.

As a result, Wisr delivered operating cash flow of $2.6 million and EBTDA of $900,000.

Wisr chief financial officer (CFO) Andrew Goodwin commented on the update: “At the beginning of the quarter, we made the prudent decision to further reduce operating costs while continuing to focus on profitability.

“This included deliberate moderation of loan origination volume along with additional headcount reductions.

“These temporary settings are considered appropriate to maintain a strong balance sheet amid the backdrop of continued monetary tightening and broader economic uncertainty.”

Mr Goodwin added that the company is “in a strong position” to safeguard against the current macro-economic climate and continue to deliver profits.

“When the conditions are deemed appropriate, the business has measures in place to pivot quickly and recommence scaling,” Mr Goodwin concluded.

[RELATED: Wisr loan book up 62%]