Shares in ASX-listed fintech Plenti Group Ltd (ASX:PLT) have surged past 70 cents, following news of a strategic partnership with National Australia Bank.
The collaboration will see NAB co-branding loans for electric vehicles and offering finance for solar panels and batteries through Plenti.
This marks a notable stride in NAB's engagement with leading startups, reminiscent of its acquisition of neobank 86 400 in 2021, which allowed NAB to re-platform its digital brand, UBank.
Plenti CEO Daniel Foggo is optimistic about future expansions of this alliance, and anticipates growth and profitability improvements.
“We’re excited about the potential for future expansion of the strategic partnership over time. This strategic partnership is expected to have a meaningfully positive impact on Plenti’s growth and profitability in future years,” said Foggo.
Leveraging Plenti’s technological capabilities
Under the partnership, NAB will refer customers to Plenti’s digital platform for car and renewable energy loans, a move that will leverage Plenti’s technological capabilities without NAB having to invest in digital infrastructure.
The financial terms of the agreement include NAB's funding of the car and EV loans, which will be held on NAB's balance sheet, with the credit risk borne by NAB. Plenti will handle the application technology, credit assessment, loan settlement and ongoing customer management, with NAB responsible for marketing.
The product, named 'NAB powered by Plenti', represents NAB's first secured car loan offer and is expected to launch between April and June of the following year.
The agreement also grants NAB rights to acquire up to 5% of Plenti through market purchases and additional placements, further cementing the relationship between the two entities.
The renewable energy finance product, slated for a launch in the first half of next year, will be funded by Plenti. Plenti will also pay NAB a referral fee under a five-year agreement, extendable for an additional five years.
Revenue growth forecast
This partnership comes as a boon for Plenti, which has been grappling with funding cost pressures. Despite these challenges, the company has managed to maintain its lending margin and expects revenue growth in excess of $200 million in 2024.
Plenti's announcement coincides with the release of its interim financial results, which show a modest interim cash profit of $1.5 million.
The company has written $624 million in new loans in the first half, marking a 12% increase, and boasts a $2 billion lending book. Its 90-day arrears rate remains low at just 45 basis points, reflecting a prime borrower book that spans car loans, other personal loans, and specialist renewable energy products.