Pepper Group released their 2016 annual report which shows double digit profit growth in 2016 to $61.0m, up 26% from $48.6m in 2015. The global consumer lending and mortgage servicing approach reach $52.4bn, comprising $7.0 bn in lending assets (up 14% from 2015) and $45.4bn in funds serviced for other institutions (up 25% from 2015).
In 2017 they are forecasting adjusted NPAT to be at least $67.5m (excluding performance fees).
Following a spate of acquisitions, they say the consumer lending businesses in UK, Ireland, Spain and Asia are building scale. They say the profitability of the Australian and Asian businesses are “lending-led”, whilst those in Europe are “Servicing-led”.
They say” we often lend when banks won’t, and we can do this because we have developed proprietary credit processes and have adopted a risk based pricing methodology though getting to know customers’ individual circumstances intimately”.
In Australia, total mortgage originations were up 36% to $2.5bn, and asset finance originations up 69% to $673m. Brokers using Pepper have grown from 600 in 2012 to over 2,630 in 2016. 72% of the portfolio is owner occupied with an average LVR of 71%. 90% of the portfolio is residential housing.
They completed 2 non-conforming RMBS transactions totalling $1.5bn in addition to $1.0 billion in whole loan sales
