MONEYME's 4Q24 Trading Update: Growth and Strong Loan Performance
MONEYME LIMITED (MME) Share Update July 2024 Wednesday 31st
MONEYME Reports Strong Growth and Improved Loan Performance in 4Q24
MONEYME Limited (ASX: MME) has released its fourth-quarter trading update for the period ending 30 June 2024, showcasing impressive growth in loan originations and improved credit quality.
Instant Summary:
- Loan originations increased by 25% to $165 million in 4Q24.
- Gross loan book balance rose to $1.22 billion, up 6% from the previous quarter.
- Net credit losses reduced to 4.5%, reflecting higher credit quality.
- Gross revenue of $54 million, maintaining a strong net interest margin (NIM) of 10%.
- Average credit score improved to 763.
- Completion of a $178 million term securitisation in July 2024.
Trading Highlights
MONEYME reported a significant increase in loan originations, reaching $165 million for the fourth quarter of 2024, up 25% from the previous quarter and 30% from the same period last year. This growth reflects the company's strategic focus on expanding its target segments.
The gross loan book balance increased to $1.22 billion, a 6% rise from both the prior quarter and the same period last year. This growth was accompanied by an increase in the ratio of secured loan assets, which now stands at 55%.
Gross revenue for the quarter was $54 million, slightly up from $53 million in the previous quarter but down 5% from $56 million in the same period last year. This revenue shift reflects MONEYME's transition to higher credit quality and secured assets.
Improved Credit Quality
Net credit losses have decreased to 4.5%, down from 4.8% in the previous quarter and 5.8% in the same period last year. This reduction is attributed to the improved credit quality of the loan book. The average credit score increased to 763, up from 751 in the previous quarter and 727 in the same period last year.
The company's net interest margin (NIM) remained stable at 10%, consistent with the previous quarter but down from 12% in the same period last year. This stability is a result of the company's focus on higher credit quality and secured assets.
Innovation and Product Updates
MONEYME expanded its product offerings to include Autopay secured car loans up to $150,000, opening new distribution channels and attracting high credit quality customer segments. The company also launched a new mobile app with enhanced functionality, leveraging its proprietary technology platform, Horizon, for improved user experience and cost efficiencies.
Additionally, MONEYME enhanced its credit decisioning engine to optimize for volume, risk, pricing, and yield. The company is also beta testing automated customer service interactions and email responses using generative AI capabilities, scheduled for launch in the first half of 2025.
FY25 Outlook
Looking ahead, MONEYME's management expects continued growth in the loan book, driven by scale and technology efficiencies. The company plans to leverage its product advantages, particularly with Autopay, to target high credit quality customers. MONEYME also aims to expand its funding programs and access term securitisation markets for capital-efficient growth.
The strong growth in loan originations and improved credit quality are positive indicators for MONEYME's future performance. The stable net interest margin and reduced credit losses suggest that the company is effectively managing its risk while expanding its loan book. These factors are likely to boost investor confidence and positively impact the company's stock price.
Investor Reaction:
Analysts are likely to react positively to MONEYME's strong performance in the fourth quarter. The significant growth in loan originations and the improvement in credit quality are key highlights that demonstrate the company's strategic focus and operational efficiency. However, some analysts may remain cautious due to the slight decline in gross revenue compared to the same period last year.
Conclusion:
Investors should take note of MONEYME's strong fourth-quarter performance and its strategic initiatives aimed at driving future growth. The company's focus on high credit quality and secured assets, coupled with its innovative product offerings, positions it well for sustainable and profitable growth in the coming year. Investors are encouraged to monitor MONEYME's progress and consider the potential long-term benefits of holding its stock.