The Cash Converters International Ltd (ASX: CCV) share price has laid flat for most of the day. The lack of movement follows the second-hand retailer and personal loan provider releasing its latest trading update for the third quarter. Coincidentally, Wisr Ltd (ASX: WZR) released its own quarterly update this morning which seems to have outshined Cash Converters results.
At the time of writing, the Cash Converters share price is 4.44% higher at 24 cents a share. Meanwhile, the Wisr share price is 6.7% higher to 24 cents a share.
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Cash Converters third-quarter update
Continued momentum in the rebounding economy has been music to the lender's ears. Improved consumer confidence typically correlates with an increase in taking on various forms of debt. Whether that's home loans, vehicles, or personal loans. This is evident in Cashies' latest update, with Cash Converters managing director, Sam Budiselik commenting:
As observed in our H1 FY 2021 results our core business segments have continued to recover in-line with Australia's ongoing economic recovery. Our secured vehicle finance and pawnbroking products, alongside our unsecured personal loan products, continue to meet the credit demand among the millions of Australians excluded from the mainstream financial system. Meanwhile, our unique secondhand retail offering continues to appeal to value and environmentally conscious consumers.
The company reported momentum across all loan products, except for its vehicle financing business. This was due to an intentional decision to reposition the vehicle financing business. The impact on loan originations is expected to be short-lived. Following a refresh, the vehicle financing unit began recovering towards the end of the quarter.
On a positive note, the combined loan book experienced an 8% lift from the previous quarter. Medium amount credit contracts (MACCs) contributed substantially to the company's loan book growth, with a 26% increase to $38 million in value. Additionally, small amount credit contracts (SACCs) grew a further 10% to $63.1 million.
Cash Converters noted a deliberate shift away from SACCs being its biggest segment of loans, at 39% of the entire loan book. This is due to the ongoing review of legislation surrounding SACC. As a result, the company plans to continue decreasing its reliance on the SACC book.
Wisr steals the share price excitement
The lack of movement in Cash Converters could be attributed to Wisr releasing more impressive growth figures. The non-bank lender expanded its loan book significantly in the last quarter, increasing 17% to a total of $488.3 million. This compares to Cashies' increase of 8% to a total loan book value of $163.1 million.
In addition, Wisr really pushed the point that its grown loan originations for 19 quarters consecutively. Comparatively, Cash Converters has been on a bumpier ride. The company's loan book actually fell in value for the prior three quarters. That's right, Cash Converters broke a losing streak today — while Wisr extended a lengthy winning streak.
A bit of extra salt in the wound for Cash Converters… While its vehicle financing business is in decline, Wisr's vehicle product delivered growth ahead of expectations. In fact, Wisr added $21.9 million in secured vehicle loans, while Cashies lost $2.9 million.
Comparing performance
Both of these non-bank lenders have delivered outperformance compared to the S&P/ASX 200 Index (ASX: XJO) over the past year. However, Wisr takes the trophy — adding 81.5% to the Wisr share price in that timeframe. Lagging behind, Cash Converters delivered a 53.3% share price increase in the past 12 months.
