Humm flags falling loan volumes as BNPL drops 61%
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The news: In an earnings downgrade on Friday, Humm Group says its loan volumes are going backwards and will finish this financial year lower than FY25.
The numbers: Humm originated $845 million of new loans for the quarter, 14% lower than the same period last year.
Consumer volumes fell 15% to $506 million with point of sale volumes in Australia of $76 million down 61% amid the launch of a newly regulated buy now, pay later (BNPL) product.
As a result, the company expects net operating income to take a $7.8 million hit this financial year. Humm said it now expects Humm loan volumes will finish the rest of FY26 below FY25 levels.
Assets under management rose 4.4% to $5.3 billion and net interest margins were maintained at 5.4%.
The context: Humm launched a new point of sale product in June as it looked to phase out its old one following new BNPL legislation. In this update it said that amid tighter credit approval processes, the product was performing "well below expectations" due to product and tech issues.
The downgrade comes as the company waits for a revised bid from chair and founder Andrew Abercrombie after lobbing an offer of 58 cents per share at the company in June. His family office, The Abercrombie Group, has previously told the market it has been waiting for further information before it can complete its due diligence. Activist investors are expected to heap pressure on the board to resolve the situation at the company's upcoming AGM.
The source: ASX
