Wisr shares gain on loan origination surge

The sharp rise came despite the lender adopting a significantly tighter credit policy at the height of the coronavirus crisis in March.

The volume of requests for support has returned to pre-COVID-19 levels in recent weeks, with just two hardship requests in June to date.

Wisr shares rocketed 35 per cent in Tuesday’s trade after the non-bank lender revealed that loan originations and hardship requests had returned to pre-Covid levels.

Loan originations surged 48 per cent month-on-month in May, to $13.8m, compared to $9.3m in April, Wisr told shareholders in a market update. The sharp rise came despite the lender adopting a significantly tighter credit policy at the height of the coronavirus crisis in March.

The company also saw the highest weekly settled loan volume in its history in May, exceeding $4m for the first time.

Wisr chief executive Anthony Nantes said the recent performance was validation of the company’s fintech business model, proprietary technology, and high performance culture.

“By rapidly responding to COVID-19 economic conditions in the third quarter, and taking a prudent approach to loan origination in the fourth quarter, we have continued to responsibly lend to our customers to help them consolidate, refinance, purchase, and fulfil their needs through the Wisr ecosystem in these uncertain times,” Mr Nantes said.

While its loan book continues to grow, the average credit score of its customers is 712, compared with the national average of 600.

For the three months through May, Wisr provided 395 customers — equivalent to 5.8 per cent of its customer base — with COVID-19-related relief packages that deferred payments for three months.

As at May 31, $10.3m, or 6.7 per cent of total portfolio loan balances, were on a COVID-19 related payment deferral, Wisr said. This compares with industry-wide deferral rates for residential mortgages of 10 per cent, and small and medium enterprise business loans of 14 per cent.

The volume of requests for support, meanwhile, has also returned to pre-COVID-19 levels in recent weeks, with just two hardship requests in June to date, the company said.

“We expected a period of heightened customer hardship stemming from COVID-19. However, this impact has been very manageable in light of the company’s very small balance sheet loan exposure, prime customer base and exceptionally low exposure to high risk sectors,” Mr Nantes said.

Wisr has confirmed that the loan deferrals due to COVID-19 won’t affect credit scores.

The company said it has the support of all its funders, including NAB, which funded its $50bn debt warehouse facility late in 2019.

“Throughout this time, the company has worked closely with our Wisr warehouse funders who are very supportive of Wisr providing customers with COVID-19 relief, including agreeing for arrears triggers to not be impacted by such relief provision,” Mr Nantes said.

Looking ahead, the company was well-positioned for growth through the COVID-19 disruptions and post-recovery, setting it up for a strong revenue growth trajectory over the coming quarters, he said.

Providing an update on the secured vehicle product Wisr was due to bring to market in the fourth quarter, Mr Nantes confirmed it would instead proceed in the first quarter of 2021.

“As widely reported, the entire auto sector experienced significant disruption in April and May due to COVID-19 social distancing measures, including inability of buyers to inspect vehicles. To maximise the impact of this exciting new product launch, the launch will now proceed in the first quarter of 2021 across all channels.”

Wisr shares ended Tuesday’s trade up 35.5 per cent at 21c.