Pepper Money Limited reported a record first half for 2026, with pro forma net profit after tax rising 15% year-over-year to AUD 53.9 million. Adjusted pro forma profit increased 20% to AUD 56.4 million, excluding non-recurring transaction costs.
The non-bank lender’s total loan originations jumped 40% to AUD 6.3 billion, driven by a 63% surge in mortgage lending to AUD 4.5 billion—the highest half-year volume in company history. Prime mortgages accounted for 79% of originations, up from 70% in the prior corresponding period, while non-conforming loans made up the remaining 21%. Asset finance originations edged up 2% to AUD 1.7 billion, with novated leases contributing 52% of the total.
Total assets under management reached a record AUD 24 billion, up 20% from June 2025 and 10% from December 2025. Following the completion of the RAMS home loan portfolio migration, total AUM exceeded AUD 40 billion. Mortgage AUM rose 32% to AUD 12.5 billion, while servicing AUM increased 26% to AUD 5.5 billion. Asset finance AUM declined 4% to AUD 6 billion due to a AUD 1 billion whole-loan sale in May.
Net interest margins expanded across the business, with the total NIM rising 12 basis points to 2.1%. Mortgage NIM increased 13 basis points to 1.64%, and asset finance NIM climbed 14 basis points to 2.87%. Operating income grew 10% to AUD 204 million, while the cost-to-income ratio improved to 49.4% on a pro forma basis and 48% after adjusting for non-recurring costs.
Pepper Money maintained a 60% payout ratio, declaring a fully franked interim dividend of AUD 0.072 per share, a 12% increase from the prior year. The company repaid AUD 27.5 million in net corporate debt and paid AUD 35 million in dividends, ending the half with AUD 79.4 million in unrestricted cash. Total facility limits expanded 13% to AUD 15.1 billion as of June 30, 2026.
CEO Mario Rehayem highlighted the growth in originations and AUM, noting the lender’s ability to expand its target market despite an anticipated market slowdown. CFO Therese McGrath emphasized cash generation as a driver of growth and shareholder returns.
The company’s shares were up 1.41% at AUD 1.80, trading 20.9% above the 52-week low but 30.2% below the high. Pepper Money’s stock has declined 22% over the past six months and 15% year-to-date.
