- 01Volumes rose 13.7% to $957.7m.
- 02Cost-to-income improved 350bps to 53.5%.
- 03NIM held at 5.3%; AUM fell 1.5% to $5.3bn.
humm Group (ASX: HUM) increased September-quarter business volumes by 13.7% to $957.7 million as its Commercial and Consumer operations both recorded higher activity.
The financial services group generated Commercial volumes of $381.1m, up 12.6%, while Consumer volumes rose 14.4% to $576.6m compared with the corresponding quarter a year earlier.
Group net interest margin (NIM) remained at 5.3% despite changes in portfolio mix, while the underlying cost-to-income ratio (CTI) improved by 350 basis points to 53.5%.
Closing assets under management (AUM) fell 1.5% to $5.3 billion, reflecting portfolio runoff, the planned Australian payment plan transition, and an adverse currency translation effect.
The group is nearing completion of productivity and return optimisation reviews intended to identify cost savings and guide capital allocation through the remainder of the financial year.
Consumer Lending Gains
Consumer volume gains covered Cards and Point of Sale Payment Plans (PosPP), with the latter increasing 16.5% to $198.6m across Australian and international markets.
Australia Cards volumes increased 14% to $134.7m and New Zealand Cards rose 13.1% to $243.3m, although both businesses reported lower Australian-dollar closing receivables.
In Australia, humm loan volumes climbed 56.1% as the business continued migrating away from humm Classic, which remains in planned runoff.
International PosPP growth included a 65.4% increase in UK volumes and an 80.1% increase in underlying UK receivables, both measured in local currency.
Ireland continued to generate profits and recorded 17.8% local-currency underlying receivables growth, while the Cards technology platform progressed into active testing.
Margins and Credit Stable
Commercial AUM grew 2.3% to $3.4 billion on stronger originations, offsetting part of the decline in Consumer AUM to $1.9 billion.
Excluding an $87.2m adverse foreign exchange translation impact, total AUM was broadly steady, rising 0.1% on the previous corresponding period.
Commercial NIM improved by 10bps to 3.2% and Consumer NIM increased 20bps to 8.4%, supporting the unchanged group margin.
Group net credit losses relative to average net receivables remained at 1.9%, with the Consumer ratio easing to 2.6% while Commercial increased to 1.5%.
The Commercial measure continues to reflect losses from earlier periods, although more recent portfolio indicators point to improving credit quality.
Simplification Shaping Outlook
Underlying CTI declined from 57% to 53.5%, with operating expenses largely contained despite inflation and irregular costs relating to restructuring and legacy legal matters excluded.
“The quarter demonstrates that our focus on disciplined growth and execution is gaining traction,” chief executive officer Angelo Demasi said.
“With several legacy corporate matters now behind us, our priority is clear: simplify the business, reduce costs, execute our transformation, and deliver sustainable shareholder value.”
Management has decided to exit the loss-making Canadian business, considering either a sale or orderly wind-down so resources can be concentrated on Ireland and the UK.
Once the Canadian exit is completed, humm expects an improvement in annualised group profit before any one-off exit costs, while continuing its focus on funding discipline and operational efficiency.
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