Money3 shrugs off Westpac snub

Lender Money3 is bullish about its prospects, despite having received notice last month from Westpac that it would end a banking relationship that includes a A$20 million securitised funding facility.

Money3 made a net profit of $13.9 million for the 12 months to June - an increase of 78.2 per cent over the previous corresponding period - and it is forecasting a profit of around $18 million for the current year.

Strong growth in earnings was driven by a 79 per cent increase in loan receivables to $130.2 million.

The company is in transition. It will continue to be a lender to consumers with impaired credit records but it is moving out of short-term unsecured lending that has long been its mainstay and shifting the business into larger secured loans, such as car finance.

Money3 acting chief executive Scott Baldwin said in a statement that $94.5 million of the loan receivables related to secured loans.

"The company is focused on the expansion of its secured lending division, which now contributes 64 per cent of group earnings before allocation of corporate overheads," Baldwin said.

"Money3 will continue with its plans to transition out of some unsecured loan products in the near future."

Baldwin said a significant event for the company during the year was the acquisition of Cash Train, which beefed up its online capabilities.

The strong growth in the loan book had an impact on bad debts and impairments. The charge for bad debts and allowance for impairment losses rose 65.7 per cent from $6.1 million in 2013/14 to $10.1 million in the year to June.

On the subject of its banking relationship, the company said the facility was drawn to $10 million and has a 12-month run-off period from December.