Solvar’s Normalised NPAT Jumps 17.4% as Loan Book Hits $832.7M
Solvar Limited reported a robust FY25 with a 17.4% increase in normalised NPAT and launched Bennji, a new commercial lending brand targeting small businesses.
- Normalised NPAT up 17.4% to $34.1 million
- Statutory NPAT surged 84.4% to $31.4 million
- Final fully franked dividend increased 40% to 8.0 cents
- Australian loan book grew 5.3% to $832.7 million
- Launched Bennji brand for commercial lending in May 2025
Strong Financial Performance Amid Strategic Shift
Solvar Limited (ASX – SVR) delivered a compelling FY25 financial performance, underscoring its resilience and strategic agility in a competitive finance market. The company reported a 17.4% rise in normalised net profit after tax (NPAT) to $34.1 million, alongside an impressive 84.4% jump in statutory NPAT to $31.4 million. These results reflect Solvar’s successful focus on operational efficiency, credit discipline, and capital management.
Driving this growth was a 5.3% expansion of the Australian loan book to $832.7 million, which offset a strategic contraction of its New Zealand portfolio by 44.4%. The pivot away from New Zealand, announced in August 2024, allowed Solvar to repatriate funds and reduce group debt by 7.4% to $587.3 million, strengthening its balance sheet and funding flexibility.
Dividend Growth and Share Buy-Backs Reward Investors
Solvar’s capital management strategy rewarded shareholders with a fully franked final dividend of 8.0 cents, lifting the full-year dividend by 40% to 14.0 cents. The company also executed a $35 million on-market share buy-back program, repurchasing 14.3 million shares at an average price of $1.46, representing nearly 7% of the register. These moves boosted earnings per share by 21.2% to 16.8 cents and increased return on equity to 9.5%.
Innovation and Funding Diversification
In May 2025, Solvar launched Bennji, a dedicated commercial lending brand designed to capture demand from small businesses seeking light commercial vehicles. This initiative leverages existing broker networks and fills a gap in the Group’s product offering, signaling a strategic push into a broader market segment.
On the funding front, Solvar successfully completed its inaugural $200 million asset-backed securitisation (ABS) in March 2025, improving funding margins by approximately 1% and expanding debt facility capacity. The Group also increased its hedging coverage of variable rate debt to 57.5%, up from 28.9% the previous year, mitigating interest rate risk amid market volatility.
Operational Efficiency and Credit Discipline
Operationally, Solvar achieved $6.6 million in general administrative expense savings, reflecting a disciplined approach to cost management and investment in technology to streamline loan applications. Credit quality remained robust, with bad debts maintained within a 3.5% to 4.5% target range for five consecutive years, supported by enhanced credit assessment frameworks.
Looking ahead, CEO Scott Baldwin expressed confidence in FY26, highlighting the expected conclusion of the ASIC matter later in the year and the potential for improved returns from the Money3 business unit. The Group’s strategic focus on funding diversification, credit discipline, and market expansion positions it well to capitalise on emerging opportunities in the near-prime lending sector.
Bottom Line?
Solvar’s FY25 results set the stage for sustained growth, but investors will watch closely how Bennji and regulatory developments shape its trajectory.
Questions in the middle?
- How will Bennji perform in the competitive commercial lending market over the next year?
- What is the anticipated timeline and impact of the ASIC matter resolution on Solvar’s operations?
- Can Solvar maintain its credit quality and operational efficiency amid loan book growth and market shifts?
