Fintech Wisr going after traditional bank customers

Non-bank lender Wisr is targeting a combined personal and auto loan book of $1bn.

Wisr is plotting an expansion of its lending products and financial wellness services. ​

Non-bank lender Wisr says it is going after traditional bank customers and is targeting a combined personal and auto loan book of $1bn, as it shrugs off the travails of other burgeoning local players.

Wisr chief executive Anthony Nantes said there were “plenty of examples” of so-called neo or digital lenders globally, that had lured meaningful market share from incumbent banks.

“We are very excited about the next few years,” he told investors and analysts of the listed company’s growth plans, adding there was a “clear path” to profitability and a $1bn loan book with a similar cost base.

Mr Nantes said Wisr had developed a “bank like relationship” with customers, without being a bank.

But Wisr’s earnings results come amid a difficult time for some of the nation’s upstart banks and lenders. Xinja late last year announced it was handing back its banking licence and removing transaction and savings products, blaming the pandemic and a difficult capital-raising environment.

Last week, National Australia Bank said it had agreed to acquire digital bank 86 400 in a $220m transaction, that will face scrutiny by the competition regulator.

Wisr’s losses narrowed to $9.36m in unaudited interim results for the six months ended December 31, from $12.85m in the same period a year earlier. Operating revenue surged 354 per cent in the half, as operating expenses climbed 59 per cent over the period.

It is targeting the $93bn total addressable consumer lending market, where it has about 0.22 per cent market share. Mr Nantes said Wisr wanted to “aggressively grow” its share of the market and achieve the $1bn loan book in the medium term.

Wisr’s loan book sits at $274.2m with the lion’s share reflecting warehouse finance-funded and off balance sheet lending. The company saw loan originations grow 166 per cent in its first half, versus a year earlier, and has written $390.5m loans to date.

Mr Nantes said Wisr could replicate its second quarter growth - where revenue jumped 43 per cent and operational expenses increased 9 per cent from the prior quarter - to accelerate expansion.

Many smaller players have, however, struggled to generate scale in Australia’s lending market given fierce competition. The market for digital personal loans outside the big banks includes a string of players including newly listed firms Plenti and Harmoney, and float candidate NOW Finance.

Wisr’s shares closed 2.7 per cent lower on Monday at 18c.

The company is looking to expand into new products and has pushed into motor finance, which it says is an addressable market of $51bn.

Mr Nantes also said the company’s COVID-19 impacted loan repayment deferrals were tracking well, with just 0.71 per cent of the portfolio remaining on repayment pauses as at December 31. That was down from 2.2 per cent in its first quarter, with Wisr noting of those customers recently ending deferral periods, 86 per cent had caught up or resumed repayments.

The company’s expected credit loss coverage ratio fell to 2.8 per cent as at December 31.

Wisr also has a focus on financial wellness initiatives for its customers, including a credit score comparison platform, data to expedite the paying down of debt and financial literacy services.

“We do think there is a much bigger opportunity beyond lending,” Mr Nantes said of the Wisr customer ecosystem.