Pepper Money Ltd (ASX: PPM) reported a 15% year-over-year increase in pro-forma net profit after tax to A$53.9 million for the first half of 2026, driven by record mortgage growth and the integration of RAMS Home Loans.
Total mortgage originations surged 63% to A$4.5 billion, the highest half-year level in the company’s history, while total originations across all lending products reached A$6.3 billion, up 40% from the prior comparative period. Mortgage assets under management rose 32% to A$12.5 billion, contributing to a record total AUM of A$24.0 billion as of June 30, 2026.
The company’s net interest margin expanded to 2.10%, supported by a 12 basis point improvement in mortgage NIM to 1.64%. Total operating income grew 10% to A$204.0 million, while expenses declined 7% to A$124.9 million, improving the cost-to-income ratio to 49.4%. Pro-forma expenses totaled A$124.9 million, with operating expenses at A$108.3 million.
Pepper Money completed the integration of RAMS Home Loans on August 1, 2026, adding 44,778 accounts and 41 full-time employees. Post-integration, total servicing AUM reached A$20.9 billion, with productivity per servicing FTE expected to rise 43% to A$160.3 million.
The company declared a fully franked interim dividend of 7.2 cents per share, a 12% increase from the prior year, representing a payout ratio of 60% and an annualized yield of 9.5%. Cash returned to shareholders totaled A$32.3 million, up 14% year-over-year.
Mario Rehayem, Chief Executive, noted the company’s focus on expanding its target market amid broader industry slowdowns, while Therese McGrath, Chief Financial Officer, highlighted the balance between growth and shareholder returns, citing A$27.5 million in net corporate debt repayments and A$35 million in dividends paid during the period.
