2 financial shares with strong growth prospects to buy today

Credit: Lif

Generally, the financial industry is better known for providing investors with income, rather than share price gains. But I believe there are a couple of financial shares on the Australian Stock Exchange which might provide investors with the latter.

Money3 Corporation Limited (ASX: MNY)

Money3 is an Australian credit provider for payday, personal, and car loans. It has, however, announced recently that it will be exiting the much maligned payday lending industry in a few months.

Management has decided to focus on the secured loans side of the business in the future, and the growth opportunities that come with it. The high-risk nature of payday loans, together with the risk of regulation changes, makes this a great move by the company in my opinion.

Despite the exit from payday loans the market expects the company to grow earnings by 16% per annum for the next couple of years.

It is worth pointing out, though, that being a relatively small cap share, Money3 does come with a higher element of risk than that of larger cap lenders such as Genworth Mortgage Insurance Australia (ASX: GMA) and Bank of Queensland Limited (ASX: BOQ). So, an investment in Money3 may not be suitable for those with lower levels of risk tolerance.

BT Investment Management Ltd (ASX: BTT)

BT is a leading Australian investment solutions provider. With around two-thirds of its revenue coming from the United Kingdom, and its JO Hambro Capital Management business in particular, I would expect the company to benefit greatly from the weaker Australian dollar.

Although the British pound itself has weakened recently due to the prospect of a Brexit from the European Union occurring in a few months, I would expect it to rebound strongly if and when Britain opts to stay in the E.U.

BT’s extensive range of investment funds continue to win awards, as well outperform the market. In fact, in 2015 its Active Balanced Wholesale Fund returned investors 5.9% (after fees), outperforming both the Lonsec sector benchmark and its peer average. I believe this level of performance will continue to encourage strong in-flows in the year ahead.

According to the brokerage arm of the Commonwealth Bank of Australia (ASX: CBA), analysts are expecting earnings and its dividend to grow by almost 17% per year through to 2018.

Shareholders have seen a fantastic average annual return of 32% in the last five years, and with its shares still some distance from their 52-week high, there is every chance that this could be a sixth year of market-beating returns for its shareholders.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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