Solvar’s H1 FY26 EPS Rises 13.5% as Loan Book Hits $846.6m
Solvar Limited reported a 13.5% rise in statutory EPS and strengthened its capital position by exiting New Zealand and securing a new $488 million funding facility. The company’s strategic moves and regulatory wins set the stage for growth in FY27.
- Commercial loan book grows to ~$67 million
- Sale of NZ written-off loans for NZD 9.4 million boosts profitability
- Federal Court dismisses majority of ASIC claims against Money3
- Statutory EPS up 13.5% to 9.3 cents with fully franked dividends declared
- New $488 million warehouse facility to reduce interest expenses in FY27
Strategic Market Shift and Profit Growth
Solvar Limited has delivered a solid first half for FY26, marked by a strategic withdrawal from the New Zealand market and a notable increase in profitability. The sale of its written-off loan book in New Zealand for NZD 9.4 million has accelerated the company’s exit from that region, lifting its H1 profitability and reducing exposure to a challenging market.
Meanwhile, the Australian loan book showed resilience, growing by 1.7% since June 2025 to reach AUD 846.6 million. This growth was supported by strong demand over the Christmas period and an expanding commercial lending portfolio, which now stands at approximately AUD 67 million.
Regulatory Relief and Legal Developments
On the regulatory front, Solvar received a significant boost when the Federal Court dismissed the majority of claims brought by the Australian Securities and Investments Commission (ASIC) against its Money3 business unit. This outcome reduces regulatory uncertainty and allows the company to focus on operational growth without the overhang of legal risk.
Capital Management and Funding Efficiency
Capital management remains a strong focus for Solvar. The company declared fully franked dividends totaling 11.0 cents per share, including a special dividend funded by the New Zealand asset sale. Additionally, Solvar executed a share buyback of 5.3 million shares during the half, reducing the share count and enhancing shareholder value.
Crucially, Solvar secured a new $488 million competitively priced warehouse funding facility, which is expected to significantly reduce interest expenses in FY27. With total funding limits around $1.1 billion and over $500 million in funding headroom, the company is well-positioned to support loan book growth without immediate equity raises.
Credit Quality and Operational Outlook
Credit quality remains stable, with bad debts improving to an annualised 2.9%, below the company’s target range of 3.5% to 4.5%. This improvement is partly due to the sale of the written-off New Zealand loan book and the growing contribution from the Bennji and Automotive Financial Services (AFS) business units, which are expected to drive further loan book quality enhancements.
Looking ahead, Solvar forecasts a normalised net profit after tax of AUD 36 million for FY26, supported by increased loan originations and the expansion of its Bennji and AFS units. The company also anticipates maintaining its dividend payout ratio in the second half, signalling confidence in ongoing cash flow generation.
Bottom Line?
Solvar’s decisive exit from New Zealand and strengthened funding position set a promising stage for growth and improved margins in FY27.
Questions in the middle?
- How will Solvar’s loan book growth trajectory evolve post-New Zealand exit?
- What impact will the ASIC litigation outcome have on Money3’s underwriting policies?
- Can the new warehouse facility sustain lower funding costs amid rising interest rates?
