Prospa bad debts pop

Ian Rogers

In a stark indicator of the stress underlying business credit broadly, specialist business lender Prospa yesterday reported that net bad debts increased by 27 per cent over the year to June 2024.

Net bad debts were 13 per cent of the lender’s average gross loans of $821 million for FY2024, Prospa said. 

There was a glimmer of slightly less lousy metrics in the second half, the company said.

“Notwithstanding this, net bad debts as a percentage of average gross loans have trended downwards in the second half of FY2024 to 12 per cent.”

Responding to the near-recessionary macroeconomic environment, Prospa said quarterly originations were $149 million over the June quarter, a decrease of four per cent “as the company continued to adopt conservative risk settings.”

Over the full year, originations were $616 million, down 18 per cent on FY2023.

“Active credit customers” dropped to 19,990, a decrease of two per cent over the year.

An ASX-listed fintech that never lived up to its early billing, Prospa won’t be listed much longer.

A consortium led by the Salter Brothers Tech Fund will soon acquire all of the issued shares in Prospa that are not already owned by the Consortium.

In its trading update yesterday, Prospa outlined some amendments to the proposed scheme, with at least one consortium member (and likely others) now expected to retain their shares rather than sell them to the bidding company.

“These changes mean that the Scheme will not necessarily result in Prospa and its subsidiaries joining the HoldCo tax consolidated group” the company said. 

“Should Prospa and its subsidiaries join the HoldCo tax consolidated group, the future tax profile of the group would depend on the extent to which Prospa Shareholders elect to receive HoldCo Shares as consideration under the Scheme, and changes from the existing tax profile may disadvantage shareholders.”