Prospa loans up 26% as SME confidence rebounds

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Origins fell in the second quarter of calendar year 2020 to just $21.9 million after the pandemic hit. Prospa was forced to write off approximately $5.5 million in loans while the annual results for the 2019-2020 financial year were sent into the red. It improved with loans of $80 million in the September quarter.

As the company continues to grapple with the challenges of the “low COVID business environment”, Moshal said he expects Prospa’s balance sheet to return to growth in the second half.

“Today’s results demonstrate that the onset of the improvement in confidence within the SME sector that we saw in the first quarter [of the financial year] have now put down deeper roots and are starting to take hold,” he said.

“We have taken a proactive role as a responsible lender to the SME sector during the pandemic and have adjusted our credit risk assessment accordingly to ensure we are now in the strongest possible position to support small businesses. as a demand for return on capital.”

The deferral period for Prospa customers is now over, with total losses to be covered by provisions of $35.5 million.

He praised his management’s ability to keep costs low during the recession, with operating expenses down 19.9% ​​year-on-year. However, it increased its sales and marketing spending in the December quarter to meet improving demand from small businesses.

Prospa’s average gross loans were worth $332.8 million as of Dec. 31, down 24% year-on-year, but the company expects the loan book to grow, she said. to the Australian Securities Exchange in a statement.

The New Zealand subsidiary issued loans worth $18 million, up 200% from the previous quarter and 25% year-on-year. The growth was attributed to “the continued robust performance of the [NZ] post-lockdown economy”.

Prospa holds cash of $111 million, flat from the previous quarter, which it says will allow it to “take advantage of future growth opportunities” as the economy recovers.

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