Jonathan Street

Leading non bank property lending specialist, Thinktank more than doubled its loan book to $5.2 billion in the past three years to 30 June 2023 – without compromising credit quality.

CEO Jonathan Street said: “Considering much of this period included the COVID-19 pandemic, with its impact on economic, business and social activity, it is a very pleasing result, especially as this growth has not come at the expense of our prudent lending standards and credit policy.”

At 30 June 2023, Thinktank has originated over $5.2 billion of commercial, residential and SMSF mortgages, compared with $2.3 billion to 30 June 2021 – a 126 per cent increase. The loan book was split 66 per cent residential to 34 per cent commercial, with self-managed super funds comprising 24.5 per cent of the total book.

Thinktank experienced historical lows in its arrears during this period, benefitting from reduced interest rates and the Government’s economic stimulus during the pandemic.

Street said: “Arrears remain below historical averages, however we have experienced a slight increase, finishing the 2023 fiscal year at approximately 50bps (0.5%). In addition, there are no loans in the portfolio we expect to incur a loss.”

He stresses that it’s important for investors to compare the performance of loan books and arrears over multiple cycles to get a true understanding of a lender’s credit underwriting standards and the ability to collect on delinquent loans.

“Vintage analysis, looking at the performance of a portfolio in different periods of time after origination, can give investors comfort that a lending business doesn’t compromise its lending standards and credit parameters when an economy is growing or contracting.

“Consistently low arrears can indicate robust credit underwriting, specifically during prosperous times.

“The resilient and continually evolving nature of Thinktank, has helped us to achieve this outcome during a particularly volatile economic period. As a business our strong focus is always on building trusted and enduring relationships across all our broker, aggregator, private investors, institutional stakeholders, and partners.”

The post Thinktank loan growth goes hand in glove with credit quality appeared first on AdviserVoice.