Why the Wisr share price is surging 32% higher today

The Wisr Ltd (ASX: WZR) share price is is flying higher today after the small-cap ASX fintech released a promising trading update.

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The Wisr Ltd (ASX: WZR) share price is is flying higher today after the small-cap ASX fintech released a promising trading update.

At the time of writing, Wisr shares have rocketed 32.26% to 20.5 cents. This takes the company’s year-to-date share price gain to just over 30%.

Wisr is an online lender that originates personal loans between $5,000 and $50,000 with 3, 5 and 7 year maturities to Australian consumers. These loans are either retained to maturity or on-sold to retail, wholesale and institutional investors.

What did Wisr announce?

This morning, Wisr revealed that the company has returned to pre-COVID-19 loan origination levels. Wisr attributed this to its rapid response to COVID-19 trading conditions and its low exposure to high-risk COVID-19 sectors.

Despite the company’s tight credit policy, Wisr reported $23.1 million in new loans originated in the first two months of Q4FY20. This comprises $9.3 million in April and $13.8 million in May, which represents 48% month over month growth.

Along with May marking a return to pre-COVID-19 loan origination levels, May also saw new records in total weekly settled loan volume.

Wisr noted that it retains support from all of its funders, with the majority of loan originations in April and May settled into the new Wisr Warehouse. This loan facility is backed by National Australia Bank Ltd (ASX: NAB) and went live at the end of November 2019.

As at 31 May, $10.3 million or 6.7% of total portfolio loan balances are on a COVID-19 related payment referral. This comes as the company provided 395 customers (5.8%) with COVID-19 relief packages during the period 1 March to 31 May 2020. Wisr highlighted these loan deferral rates compare favourably to industry-wide deferral rates for residential mortgages and business loans.

Hiccup in new product launch

Additionally, Wisr reported a slight delay to the launch of its secured vehicle product. The company was poised to launch this product to market in Q4FY20, however, plans have changed in the wake of COVID-19.

“As widely reported, the entire auto sector experienced significant disruption in April and May due to COVID-19 social distancing measures, including inability of buyers to inspect vehicles,” Wisr stated.

As a result, Wisr will roll-out the secured vehicle product across all channels in Q1FY21 in order to maximise the impact of the launch.

Management commentary

Commenting on recent trading conditions, chief executive Anthony Nantes said:

“Our key origination and risk metrics are showing that Wisr’s purpose-led model is driving growth and revenue in line with risk appetite and above management expectations.”

“We expected a period of heightened customer hardship stemming from COVID-19. However, this impact has been very manageable in light of the Company’s very small balance sheet loan exposure, prime customer base and exceptionally low exposure to high risk sectors. We are now back to pre-COVID-19 levels for customer support requests.”

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