Lending jumps by 40%
MTF Finance has reported net profit after tax (NPAT) of $11.6 million for the 12 months to September 30 – up 38 per cent on the previous year – with lending assets increasing by 32 per cent to $1.01 billion.
Underlying profit after tax has increased by 71 per cent to $11.3m and total originator earnings have climbed by 27 per cent to $85.5m.
The company says the results reflect its continued focus on community lending, and expanding its dealer network and digital offering, projecting it into the top tier of non-bank lenders.
MTF’s model, whereby its franchises and dealers make lending decisions, recorded record low arrears at less than half the industry average.
It has also supported a record growth year that has delivered unprecedented momentum with lending up 40 per cent year-on-year to $846m, up from $607m in September 2022.
Chris Lamers, pictured, chief executive officer, says the results “demonstrate the important role that MTF Finance plays in its communities, and comes at a challenging time when many New Zealanders are feeling the effects of recent interest-rate rises and the increased cost of living”.
The combination of strong lending growth and well-managed operating expenses have allowed it to hold interest rates as low as possible, as well as deliver record returns to lenders.
“Key to achieving this was a clear strategy designed to deliver growth and resilience during a tough economic climate,” says Mark Darrow, MTF Finance’s chairman.
“We grew our reach by adding franchises to reach 51 around the country with two more opening in November, bucking the trend when others are closing local branches.
“We also grew the motor-dealer channel with more focus in this area and completed a fintech acquisition. It has been a busy and successful year.”
The purchase of The Lending People in February gave customers access to a new online digital-lending channel, while franchise branches continued to provide dedicated financial advice and solutions at a local level.
“Insurance partnerships initiated this year with AMI and Tower have been a welcome addition to the incumbent offering with Autosure,” adds Lamers.
“These product offerings allow MTF Finance to become a one-stop shop for our customers, growing the business and taking the pain out of the customer having to secure these services for themselves.
“Backing local businesses and communities does so much more than just help the economy. It builds connections, strengthens our neighbourhoods and makes New Zealand stronger by making finance more accessible to everyday Kiwis.
“Our owner-operators, including our franchisees and vehicle dealers, make the lending decision in the best interests of the customer.”
Lamers says the current economic cycle has placed increasing pressure on households nationwide, and MTF Finance is focused on helping clients in financial need.
The company took proactive steps to provide customers with practical tools and guidance to help them make well-informed money-related decisions, which have been borne out by the company having industry-leading low levels of loan arrears.
This was also evident during Cyclone Gabrielle when it rallied to support impacted communities guided by our owner-operators living in the same communities.
Looking forward, Lamers says the company will continue to be close to its customers to ensure it is proactive in looking after them as economic conditions harden with increases in wholesale interest rates and inflation fuelling a cost-of-living crisis.
The company plans to launch the brokering of home loans through its franchise network, and will continue to enhance its offering through existing and new partnerships. There will also be an increased focus on community engagement through an evolving environmental social and governance strategy.
Crunching the numbers
MTF Finance’s automotive loan arrears exceeding 31 days stand at 0.6 per cent against an industry average of 2.4 per cent, with business loan arrears calculated at the same benchmark currently tracking at 0.9 per cent against an industry average of two per cent.
Consumer loan arrears with the company over the past 12 months are lower than the industry average of 4.5 per cent at 0.3 per cent, with high-risk consumer loan arrears at 6.6 per cent against the industry average of 15.1 per cent.
It scores highly on Net Promoter Score, a key identification of customer satisfaction, with 2022 evaluations at 79 points against an industry average of 44. More than 10,000 Trust Pilot customer reviews gave MTF Finance 4.9 out of five for customer satisfaction.
