Why Did Humm Group’s Australian Point of Sale Volumes Plunge 61% in 1Q26?
Humm Group reports a 14% decline in new loan originations for 1Q26, driven by a steep 61% fall in Australian Point of Sale volumes following regulatory changes and technology setbacks. However, international growth and asset expansion provide some offset.
- New loan originations down 14% to $845 million in 1Q26
- Australian Point of Sale volumes plunge 61% due to product and tech issues
- Commercial lending volumes fall 13%, but assets under management rise 7.2%
- Credit losses increase with commercial net loss ratio up 70 basis points
- International Point of Sale volumes grow strongly, partially offsetting domestic declines
Quarterly Overview
Humm Group Limited has released its first quarter update for FY26, revealing a challenging start to the year marked by a 14% decline in new loan originations to $845 million. This downturn reflects subdued demand in the commercial lending segment and significant disruptions in the Australian Point of Sale (POS) business, which saw volumes collapse by 61% compared to the prior corresponding period.
Impact of Regulatory Changes and Technology Issues
The sharp drop in Australian POS volumes follows the launch of a new regulated loan product in June 2025, introduced in response to updated Buy Now, Pay Later (BNPL) legislation. While a reduction in volumes was anticipated due to tighter credit approvals, the actual performance has fallen well short of expectations. The company cites product and technology issues at launch as key factors behind the underperformance, prompting a strategic focus on refining credit processes and upgrading technology platforms.
Commercial Lending and Asset Growth
Despite a 13% decline in commercial loan volumes, humm Group’s commercial segment managed to increase assets under management by 7.2% to $3.3 billion. This was achieved amid a competitive pricing environment and a deliberate shift toward higher credit quality assets, which compressed margins by 51 basis points compared to FY25. The commercial business also slightly improved its market share and outperformed sector growth, signaling resilience despite headwinds.
Credit Losses and Financial Health
Credit losses have risen, with the commercial net loss to average net receivables (ANR) ratio increasing by approximately 70 basis points to 1.62% in 1Q26. The company expects elevated losses to persist through the first half of FY26 before stabilizing. Consumer credit losses remain stable, with a net loss ratio of 2.3% for the Australian POS loan product, reflecting the cautious credit approach under the new regulatory regime.
International Performance and Outlook
Internationally, humm Group’s POS businesses in Ireland and the UK delivered strong volume growth of 33% and 43% respectively, partially offsetting the domestic decline. The Canadian POS segment, however, experienced a 54% volume drop as the company optimizes its operating model for sustainable growth. Meanwhile, New Zealand Cards outperformed sector growth despite currency headwinds, and Australia Cards showed modest volume increases despite a deliberate slowdown in new customer acquisition ahead of a technology platform upgrade.
Strategic Priorities Moving Forward
In response to these mixed results, humm Group is prioritizing enhancements to its credit approval processes, technology platforms, and merchant partnerships, alongside cost reduction initiatives. These efforts aim to stabilize and eventually grow the Australian POS business while maintaining momentum in international markets and commercial lending.
Bottom Line?
Humm Group’s next quarters will be critical to see if technology fixes and strategic shifts can reverse the Australian POS slump and contain rising credit losses.
Questions in the middle?
- How quickly can humm Group resolve the technology and product issues impacting Australian POS volumes?
- Will elevated commercial credit losses stabilize as expected in the second half of FY26?
- Can international POS growth fully offset the domestic market challenges over the medium term?
