Consumer lender Plenti has decided to prioritise margin protection over loan growth, reporting that originations were down in the June quarter.

Plenti said it originated A$289 million of automotive, renewable energy and personal loans in the June quarter, which was 10 per cent lower than originations in the March quarter.

In its financial report for the year to the end of March, Plenti said it charged an average interest rate of 9.4 per cent in 2021/22 and its funding rate was 3.6 per cent.

The business is funded through warehouse finance and securitisation. Its asset-backed securitisation issuance was more than $1 billion over the past year.

Its funding costs have increased as both margins and benchmark rates have increased this year – a situation facing many non-bank lenders.

In June, it raised $437 million through an ABS issue, Plenti Auto ABS 2022-1. The A notes, worth $361 million, were priced at a margin of 140 basis points over the one-month bank bill swap rate and the A-X notes, worth $7 million, were priced at a margin of 135 bps.

The A and A-X notes in last year’s ABS transaction were priced at a margin of 80 bps

Yesterday it reported that its margins were down from February through to May but after increasing its borrower interest rates, its margin recovered in June.

The loan portfolio at June 30 was $1.4 billion. Automotive loans accounted for $838 million, personal loans $451 million and renewables loans $151 million.

Loan arrears (90 days or more past due) were 31 basis points.