SPATA Our originations have been robust despite changing economic conditions. We continue to experience benefits from structural opportunities across the consumer and commercial lending sectors. Increased funding costs are putting pressure on all parts of the sector, which is forcing a re-focus on product viability through the cycle. This is beneficial for our seasoned consumer offerings.

With cost-of-living pressures, customers are considering ways to manage their cash flow better. Our consumer offerings provide breathing space in this environment, which is resonating with our customer base. Our point-of-sale payment plan (PosPP) product is focused on spreading larger ticket purchases over longer tenors and our credit card products offer strong value propositions including our 90-day interest-free offering.

Our long history in this space means we are well placed to manage any headwinds over the next 12-24 months, including credit deterioration. Performance across our portfolios has been resilient and we maintain proactive and robust collections strategies across all portfolios, which we continue to finesse over time.

SPATA Our commercial book, across Australia and New Zealand, has grown substantially over the last few years: our receivables ticked over A$2.3 billion (US$1.5 billion) at 30 June 2023.

We have been disciplined in executing our simplified strategy to be Australia and New Zealand’s leading provider of specialist asset finance. Our sole focus on broker distribution has allowed us to invest heavily in understanding and growing this channel, and we saw a 23 per cent increase in brokers with one or more deals in FY23.

KO The majority of humm’s PosPP portfolio consists of larger ticket, longer tenor contracts predominantly within the solar, health and home improvement verticals. This is our “big things” product, that has been in the market for more than 20 years. While we still currently offer the smaller ticket, shorter tenor product – known as “little things” – as a companion product, this represents a very small portion of our portfolio. We continue to refocus away from “little things” and our FY23 results show growth in larger transaction value purchases, particularly in solar and health.

In the near term, we see opportunities to profitably grow merchant and customer numbers thanks to reduced competition in Australia with the exit of a number of BNPL players.

Responsible lending considerations are front of mind for our business and the prospect of regulation has been on our radar for a long time. We are an existing provider of regulated consumer credit products – our humm90® credit card – in Australia, meaning we already have the back-end systems and processes in place to be able to comply with any responsible lending requirements imposed by the regulation.

We are able to extend these processes to our PosPP product relatively easily and, while there may be some adjustments once the formal legislative requirements are in place, we welcome the regulation and have already incorporated it into our strategy.

KO New Zealand seems a bit more pessimistic than in Australia. However, the performance of our New Zealand cards book remains resilient even against the backdrop of the successive rate rises.

While retail spending is down in New Zealand, our Q Mastercard product has grown as a proportion of market share. We see this as reflective of the card’s value proposition, in particular the offering of the longer interest-free period, and of the New Zealand consumer seeking to use this to manage cash flow.

SPATA Our funding platform, which now exceeds A$5.5 billion, has expanded fairly materially over recent times as we seek to ensure we have appropriate capacity to support growth opportunities. Importantly, we have remained a through-the-cycle issuer with regular cadence in accessing markets – which we expect to continue.

With lower issuance volume from nonbank mortgage lenders, we hope more investors will have reason to consider the depth and relative value offered by the growing nonmortgage asset-backed securities sector. Alongside autos, we believe asset finance will become a very meaningful asset class and we look forward to building out this market further over the coming years.