Our auto programme commenced in 2014 and in the time since we have slowly built up originations. The book currently stands at around A$650 million (US$436.5 million) and I expect we will do our inaugural transaction in late October or early November. It will likely launch with an indicative volume of A$300 million.

The product is consumer-only and is a little different from our other offerings in that until recently is has been predominately distributed through our online retail business, loans.com.au. It also links in with our recently acquired car-buying business, OnlineAuto. This means when a customer is looking for finance we are also able to provide them with the vehicle itself.

There was a surge in business during COVID-19 but the physical supply of vehicles was not there. This year, particularly the last few months, has been very strong for us – largely due to supply coming back. We now originate around A$50 million in loans per month.

We have a product that offers EVs and hybrids at a 70 basis point discount off our best base rate, but we will not be including any of these assets in the inaugural ABS trade. There is sizeable volume but not enough for a solid green tranche. We will hold it back with a view to including a green tranche in our second transaction, which will most likely be next year.

While the first transaction will not include any green assets, it will include line-by-line details on the CO2 emissions of each vehicle. This will allow investors to see how green or brown the portfolio is. I believe we are the first issuer to do this, and I hope it becomes the new standard.

We have written A$130 million of green mortgages for new builds. Supply issues have slowed the pace but there is progress, and the discount is making a difference.

We are also about to launch a new product, RetroFit, which will allow borrowers to reduce energy emissions by making alterations to an existing property. This will also carry a discount – likely 40-50 basis points – in addition to the energy cost savings. The improvements required will be based on a range of data points, such as the location, number of bedrooms, whether or not there is a pool and if it uses mains gas.

This ties in with the philosophy of everything we do. It is only a green product if it makes a difference to the environment while also influencing a decision that might not have happened otherwise. For a new build, this could include the use of more energy-efficient building materials, or for an existing home it could mean taking the property off gas or adding solar panels to reduce total emissions.

The major banks are increasingly targeting home loan lending – and, in particular, owner-occupiers with an LVR [loan-to-value ratio] of less than 70 per cent. This makes originating in the super-prime owner-occupier space challenging. Even if there is a margin, the majors are also offering large cashback offers.

However, at the same time banks are also exiting other spaces. This creates an opportunity for us in certain products, such as SMSF [self-managed superannuation fund] and auto lending, even as it makes us scratch our heads about continuing to compete in the super-prime space where we have always been.

Our online retail business offers very cheap and efficient distribution and, to a certain extent, the competitive margins on our owner-occupier products are offset by the far wider margins we receive for our SMSF, investor and auto loans. In our case it all complements each other, but it is a difficult dynamic. We are fortunate to have a well established and diversified balance sheet, but I imagine it would be tough for new lenders or issuers that have not established that diversity.