Pepper sees record surge in mortgage originations

In a recent trading update, the global mortgage provider announced an adjusted NPAT of $48.6 million for the 2015 calendar year, up 38 per cent.

Pepper grew lending assets under management (AUM) by 34 per cent to $5.6 billion in 2015, delivering income of $105.9 million, up 27 per cent on the previous year.

The non-bank lender achieved strong organic growth in Australian residential mortgages during the calendar year, launching its first direct-to-consumer campaign in Australia, while building brand awareness and supplementing its established broker and white label distribution channels.

Pepper’s Australian mortgage settlements increased by 36 per cent in 2015, with broker-originated loans up 37 per cent, direct-to-consumer up 57 per cent and white label up 30 per cent.

The group also recorded a strong improvement in delinquency rates in the second half. In its investor presentation, Pepper noted that it ceased lending in large mining areas 18 months ago.

Pepper co-group CEO Mike Culhane said Pepper experienced “record loan originations” in 2015, supported by increasing penetration of national broker networks, white-label partnerships and further investment in its direct-to-consumer channel.

“International consumer lending performed strongly in both Spain and South Korea,” Mr Culhane noted.

“We also expect a further ramp up of our recently-established lending businesses in the UK and Ireland into 2016.”

Pepper co-chief executive Patrick Tuttle highlighted that over the past five years the team has grown assets under management at a compound annual growth rate of 126 per cent.

“Our business continues to grow strongly across its core lines including residential mortgages, consumer lending and loan servicing. With income diversified across capabilities, asset classes and geographies, Pepper is able to pursue growth opportunities through the credit cycle,” Mr Tuttle said.

[Related: Pepper announces first profit result since float]