One Financial Services Stock For Long-term Growth

One Financial Services Stock For Long-term Growth

The outbreak of COVID-19 pandemic has impacted several sectors as well as companies. The lockdowns were imposed so that the spread of the COVID-19 can be restricted. However, there are some companies which are now expected to perform well. This company has recently released metrics for H2 FY 2021 and it has robust capital position which could help the company in navigating tough operating conditions. The stock price of this company has encountered an increase of ~57.8% in 1 month. However, in the time frame of 3 months, the stock rose by ~9.09%.

Harmoney Corp Limited


  • At 30th June 2021, the group receivables stood at NZ$501 Mn, reflecting an increase from NZ$468 Mn at 31st December 2020.
  • The company witnessed total group originations of $250.4 Mn in H2 FY 2021 as compared to $193.7 Mn in H1 FY 2021, reflecting the growth of 29%.
  • HMY stated that Australian receivables book witnessed a growth of 33% since December 2020.

Harmoney Corp Limited (NZX: HMY) is engaged in providing online direct personal lending services throughout New Zealand and Australia. It provides unsecured personal loans that are easy to access, competitively priced, and accessed 100% online.

Performance in H1FY21 (For the Period Ended 31 December 2020)

The group has reported a total income of NZ$42 million in H1FY21 that remained in line with H1FY20. However, it recorded a growth of $4.0 million in its cash NPAT over H1FY20 led by a comparatively strong net operating margin as well as lower marketing spend and funding costs. Further, the net interest margin improved to 10.9% from 9.5% in H1FY20 supported by its transition towards 100% warehouse funding from historic peer-to-peer funding that resulted in higher income and profitability per loan to Harmoney.

In aggregate, the company has managed to originate more than NZ$1.9 Bn in the personal loans, growing at the CAGR of 79%, as well as has served over 48,000 customers throughout ANZ. The company’s loan portfolio demonstrated robust credit performance with arrears as well as losses at the historic lows.

Key Data (Source: Company Reports)

Robust Originations Growth in H2FY21

HMY has delivered a healthy performance in H2FY21 while achieving the highest ever monthly originations of NZ$53 million in June 2021. Resultantly, total originations for H2 FY 2021 amounted to NZ$250 Mn, supported by the robust rise in the new customer originations.

HMY achieved robust growth in new customer originations over H2 FY 2021 with an attractive net interest margin of 11%. Besides, it has sustained its strong credit performance driven by HMY’s high-quality loan book, with Group 90+ day arrears at 0.69%.  

At 30th June 2021, the group receivables amounted to NZ$501 Mn, reflecting a rise from NZ$468 Mn at 31st December 2020. Notably, Australian receivables witnessed a growth of 33% in the 6 months since December 2020. However, the NZ receivables book was adversely affected by the strict COVID-19 lockdowns in NZ in CY 2020 but, in June 2021, it returned to growth. It was supported by the release of Harmoney’s Libra 1.8 behavioural credit decisioning as well as price engine and economic tailwinds.

Do Read: Why are these 8 NZX-listed stocks under the spotlight?

Stock Information

The company has managed to accelerate the data-driven marketing program after the listing on ASX/NZX last November, leading to the robust rise in the new customer originations.

The capital position of the company remained healthy as its undrawn committed warehouse funding lines stood at NZ$216 million as at 30th June 2021. This is before the inclusion of the Australian and New Zealand Heartland Bank warehouse facilities which was announced earlier, that are anticipated to be completed in the upcoming months.

Do Read: 5 Interesting NZX stocks garnering investors’ attention - HMY, PPH, GTK, CGF, IFT


The company has stated that it has the clear strategy of growing the attractive margin personal loans throughout ANZ, where the total addressable market has been expanding as traditional financiers are contracting as well as more and more customers are preferring to go online when it comes to financial services. There are expectations that, in FY 2022, this strategy would be leading to additional revenue for the company as well as add to the existing scale as the company grows its Australian business which has very little fixed cost because of the leverage the company is able to achieve from the lower cost NZ headquarters.

The company’s receivables are anticipated to witness an increase at the higher levels in FY 2022 as the group realises the benefits of: 1) Higher new customer originations post the resumption of Harmoney’s data-driven marketing program post IPO, 2) Launch of LibraTM 1.7 in Australia in the month of February 2021 as well as LibraTM 1.8 in NZ in the month of June 2021, and 3) Repeat customer originations growth because of higher Australian as well as NZ new customer originations in 2H FY 2021.

The stock of the company ended the session at NZ$2.400 per share on 16th July 2021.

Also Read: What are the top 10 NZX-listed financial companies?



We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK