humm Group reports a $13.9 million statutory profit for 1H26, driven by commercial lending growth and strong consumer segment performance despite rising credit losses and regulatory costs.
- Statutory profit after tax of $13.9m, up 13% on prior half but down 49% on prior year
- Assets under management steady at $5.4b with commercial AUM growth offset by consumer decline
- Credit losses increased due to portfolio seasoning, particularly in commercial lending
- Consumer segment profit up 76.5%, led by humm Ireland and New Zealand Cards
- Fully franked interim dividend of 1.50 cents per share declared
Solid Profit Growth Despite Market Headwinds
humm Group Limited (ASX – HUM) has released its half year results for the six months ending December 2025, reporting a statutory profit after tax of $13.9 million. This marks a 13% increase compared to the previous half but reflects a significant 49% decline against the prior corresponding period. The company’s assets under management (AUM) remained relatively stable at $5.4 billion, with commercial lending assets growing by 5.7% year-on-year, while consumer finance assets declined by 5.1%.
The company’s shift to statutory accounting measures for profit reporting aims to enhance transparency and comparability, a move welcomed by investors seeking clarity amid evolving market conditions.
Commercial Lending Faces Credit Loss Pressures
The commercial segment delivered a statutory profit of $13.4 million, down 12% on the prior half and 53% on the prior year. This decline was largely driven by elevated credit losses, which peaked due to the seasoning of the commercial loan portfolio. The net credit loss to average net receivables ratio rose to 1.3%, reflecting the impact of loans originated during periods of rapid growth in 2022 and early 2023. However, management anticipates credit losses will stabilise and trend downward in the second half of 2026, supported by tighter credit settings and a focus on higher-quality assets.
Despite subdued SME market conditions, the commercial business maintained strong broker relationships and diversified its portfolio across sectors such as construction, engineering, and agriculture.
Consumer Segment Shows Resilience and Growth
The consumer finance segment posted a robust statutory profit of $14.3 million, up 76.5% on the prior year and 180% on the prior half. This growth was driven by strong performances in humm Ireland and New Zealand Cards, with the latter increasing market share to 8.45% and maintaining leadership in new card issuance. New Zealand Cards volumes grew 2.4% year-on-year despite macroeconomic challenges and currency headwinds.
In Australia, the Cards business experienced a modest decline in profit due to higher operating costs linked to an ASIC inquiry and a deliberate slowdown in customer acquisition ahead of a major technology platform upgrade. The company has commenced a strategic rebuild of its cards technology platform to support scalable growth and improved credit management.
Technology and Litigation Impact Costs
humm Group’s Point of Sale Payment Plans business faced challenges with the launch of the new humm loan product in June 2025, but transaction volumes improved significantly in the second quarter of 1H26. International operations showed progress, with humm Ireland outperforming and the UK and Canada markets stabilising after strategic resets.
Costs increased due to targeted investments in technology and an $8.3 million charge related to irregular items, including adjustments to the Forum Finance litigation provision following a recent Federal Court judgment. These legal and regulatory expenses contributed to a higher cost-to-income ratio of 57.4%.
Capital Position and Dividend
The company closed the half with a strong capital position, net tangible assets per share rising to 83 cents. The Board declared a fully franked interim dividend of 1.50 cents per share, payable in March 2026, reflecting confidence in the company’s financial resilience and future prospects.
Looking ahead, humm Group plans to focus on profitable growth by optimising its Australian consumer business, advancing technology platform upgrades, and managing credit risk carefully. The company’s diversified business model across geographies and products positions it well to navigate ongoing economic uncertainties.
Bottom Line?
humm Group’s 1H26 results underscore resilience amid credit pressures and regulatory costs, setting the stage for strategic technology upgrades and credit stabilisation.
Questions in the middle?
- Will credit losses in the commercial portfolio return to historical lows in 2H26 as expected?
- How will the ASIC inquiry and Forum Finance litigation impact ongoing operating costs and capital allocation?
- What is the timeline and expected impact of the cards technology platform rebuild on customer growth and profitability?