Plenti Group Ltd (ASX: PLT) shares are racing higher on Tuesday morning.
At the time of writing, the ASX financial stock is up 120% to 74 cents.
Why is ASX financial stock Plenti jumping?
In respect to the latter, the ASX financial stock reported a 51.8% increase in revenue to $96.8 million but a 75.7% decline in profit to just $0.6 million. This reflects a significant jump in loan funding costs compared to the prior corresponding period.
What was the good news?
The good news that is driving Plenti shares higher today is that it has formed a partnership with banking giant National Australia Bank Ltd (ASX: NAB).
According to the release, Plenti and NAB have entered into a strategic partnership under which Plenti will provide "NAB powered by Plenti" and Plenti own-branded finance solutions to NAB's large personal banking customer base.
Management highlights that the strategic partnership combines NAB's trusted brand and deep customer relationships with Plenti's award-winning consumer finance experiences, efficiency, and technology.
The initial focus will be car and electric vehicle (EV) loans and then making Plenti renewable energy finance available to NAB customers.
As part of the deal, the two parties have entered an equity investment agreement, which allows NAB to acquire or subscribe for up to 15% of Plenti's share capital, based on the achievement of certain milestones.
The first 5% may be bought on market, whereas the remaining 10% will be via two 5% placements at up to 90 cents and $1.20 per share, respectively.
The ASX financial stock's founder and CEO, Daniel Foggo, said:
This strategic partnership makes sense – it brings together one of Australia's largest and most trusted financial institutions with one of Australia's most innovative and awarded financial technology companies. Together we see an opportunity to better serve new and existing customers with car and renewable energy lending products and 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.