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Wisr to remain conservative as it looks to grow NIM

by Josh Needs12 minute read

The non-bank lender has said it will continue to focus on profitability rather than growth, as tightened economic conditions endure.

ASX-listed non-bank lender Wisr has declared it will continue with its “broadly conservative stance” into the future on the back of the large-scale monetary policy tightening and its belief that the tightening cycle is “still underway”.

At its financial year 2023 results and company update yesterday (24 August), the lender stated that the past financial year had been a “year of recalibration for the business”, having shifted from a high-growth organisation with “25 consecutive quarters of growth to one of focus on profitability, given the changes in the macro-economic environment”.

The company outlined its focus in FY24 will be to maintain a strong balance sheet and continue delivering profitability both in the short term and sustainably in the long term, by focusing on its net interest margin (NIM) expansion.


Wisr’s recently appointed chief executive Andrew Goodwin stated: “As we enter FY24, we will continue our broadly conservative stance until market conditions stabilise with a continued focus on NIM expansion and maintaining a strong balance sheet to deliver a profitable company.

“A key focus for the business is the expansion of NIM, the reason for that is our cost of doing business increased so significantly both at the end of FY22 and FY23 with the rising cost of funds.

“We intend to do it in a very prudent way, what we’re targeting is we are at the 5 per cent run rate right now and we want to get to around a 6 per cent NIM level over the medium term, as we hit scale and in our view will deliver a highly profitable business.”

Mr Goodwin said while the organisation had chosen to shift its focus from growth to profitability through the process of “turning off loan purposes”, he stated it would be “quite easy” to revert to growth when the economic environment calls for it.

He said: “We are monitoring the broader environment very closely, particularly for the tightening of the monetary policy and the cash rates are to stop and ideally start coming down, at which point our intention is to start growing in volume again.

“It will be done in a very prudent way with a real focus on balance sheet strength and pleasingly it is quite easy, relative to moderating growth, to turn channels back on.

“It is actually fairly effective to just turn those back on and scale back up if and when we choose to.”

The attention on profitability saw positive returns as the organisation achieved $92 million in operating revenue, up 55 per cent, with the lender also having looked at cost savings to help boost its profitability.

Mr Goodwin said: “Cost management has been a key focus this year. We’ve had two material reductions in headcount and a real focus on external spending, including marketing.

“We’ve also adjusted our gross spend on strategic initiatives, with that focus on profitability in mind. All of this has culminated in delivering $7.4 million in operating cash flow.”

Originations fell 19% in FY23

Given the lender’s focus on profitability rather than growth, Wisr’s FY23 results revealed a 19 per cent drop in new loan originations to $495 million, down from $611 million in FY22.

Despite the reduction in originations, Wisr confirmed its loan book still achieved growth of 19 per cent over the year to finish at $931 million compared to the previous year’s $780 million.

The lender’s 90-plus day arrears rate rose in the year, growing from 0.98 per cent to 1.25 per cent as of 30 June 2023.

Speaking to The Adviser, Wisr’s chief commercial officer and head of broker Peter Beaumont said brokers remained an important channel for the lender.

Mr Beaumont said: “We’ve been supporting brokers with our low-interest rate consumer loans since 2015. The broker channel has always been and continues to be an important loan origination channel.

“Wisr’s success has been built on providing brokers with a great deal for their clients, a quick and easy digital process, personalised service from an excellent BDM team, consistent credit decisions and last but not least attractive incentives.”

Former CEO facing court

The financial results were released on the same day that Wisr’s former CEO Anthony Nantes faced Waverley Local Court after the NSW Police commenced criminal proceedings against him.

While details of the charges have not been made public, the company confirmed Mr Nantes had been subject to criminal proceedings brought by law enforcement with the court also having heard for mention the NSW Police’s apprehended violence application taken out against him.

Mr Nantes was terminated as CEO of the personal lender last week (16 August) with the board stating he was unable to perform his role at the ‘level required’ and stating the termination was not to do with any financial irregularity with the company.

Interim chair of the Wisr board, Matthew Brown, briefly addressed the matter before revealing the lender’s results and again confirmed that “as these matters are before the courts, it would not be appropriate to comment further on”.

[Related: Former Wisr CEO faces court, new CEO appointed]

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