Pepper Money (PPM) H1 2025 earnings summary

Executive summary

• Net profit after tax for 1H 2025 was $47.0 million, up 2% year-over-year, driven by strong originations, scale gains, and disciplined cost management.

• Total originations reached $4.5 billion, up 38% year-over-year, with mortgage originations up 53% and asset finance up 19%.

• Assets under management reached a record $20.1 billion as of June 30, 2025, up 4% year-over-year, with a shift toward prime lending and robust servicing growth.

• Special and interim dividends totaling 18.9c per share were declared, delivering over $83 million in returns and up to a 20.9% annualized yield.

• Profit before tax and loan loss expense was $109.2 million, up 1% year-over-year.

Financial highlights

• Net interest margin (NIM) for H1 2025 was 1.98%, up 6 basis points year-over-year; mortgage NIM at 1.51% (down 9bps), asset finance NIM at 2.73% (up 21bps).

• Total operating income was $185 million, down 1% year-over-year; EBITDA was $89.5 million, flat year-over-year.

• Total expenses reduced by 2% year-over-year to $116.7 million, with a cost-to-income ratio of 51.7%.

• Loan loss expense was $40.9 million, nearly flat year-over-year; total provisions increased to $124.7 million.

• Basic EPS was 10.62c, up from 10.46c in 1H 2024.

Outlook and guidance

• Management expects a strong finish to 2025 and a fast start to 2026, supported by product innovation, technology investment, and favorable market conditions.

• Second half OpEx expected to remain steady, with inflationary adjustments and some marketing spend increases.

• Mortgage NIM expected to remain around current levels if prime origination trends continue.

• Prudent provisioning and cautious credit risk management continue amid macroeconomic uncertainty.

• Demand for Whole Loan Sales and servicing is expected to remain strong.