Pepper Money Posts $104.8m Profit on $10.3bn Originations in 2025

Strong Financial Performance and Growth

Pepper Money Limited has delivered a landmark year for the financial year ended 31 December 2025, reporting a pro-forma net profit after tax of $104.8 million, a 7% increase on the prior year. This growth was underpinned by record originations of $10.3 billion, marking a 47% rise, and total assets under management (AUM) reaching $21.8 billion, up 14% from 2024.

The company’s mortgage segment was a key driver, with originations soaring 66%, notably boosted by prime and Self-Managed Super Fund (SMSF) lending. Asset finance also contributed strongly, growing 20% year-on-year. These achievements reflect Pepper Money’s strategic focus on diversified lending and capital-light servicing models.

Capital Management and Shareholder Returns

Capital management remained disciplined, with Pepper Money raising a record $7.0 billion in funding through term securitisations and whole loan sales. The company executed seven whole loan sales totaling $3.5 billion, supporting its capital-light servicing business and enabling debt reduction.

Reflecting its robust financial position, Pepper Money declared fully franked dividends totaling 26.7 cents per share for 2025, amounting to $118.6 million returned to shareholders. This includes a special dividend of 12.5 cents, an interim dividend of 6.4 cents, and a final dividend of 7.8 cents per share payable in April 2026.

ESG and Climate-Related Reporting Advances

In compliance with the Australian Sustainability Reporting Standard (AASB S2), Pepper Money enhanced its climate-related disclosures in 2025, embedding environmental, social, and governance (ESG) considerations into its risk management and corporate governance frameworks. The company’s Board Environmental, Social and Governance Committee oversees these initiatives, ensuring alignment with evolving regulatory requirements and stakeholder expectations.

Pepper Money conducted a comprehensive climate risk materiality assessment and scenario analysis, addressing physical and transition risks. While direct operational emissions remain low, the company is proactively managing portfolio risks related to extreme weather events and macroeconomic transition factors, such as inflation and interest rate changes.

Strategic Acquisition and Market Developments

In a significant corporate development, Pepper Money announced its participation in a consortium to acquire the $21.4 billion Westpac RAMS mortgage portfolio, with Pepper Money appointed as the servicer. The transaction is expected to complete in the third quarter of 2026, subject to conditions precedent.

Additionally, Pepper Money disclosed receipt of a confidential, non-binding indicative proposal from Challenger Limited to acquire 100% of its shares. The Pepper Money Board has granted exclusivity to Challenger for due diligence, though there is no certainty the proposal will result in a definitive agreement.

Governance, Risk, and Executive Remuneration

Pepper Money maintains a robust risk management framework addressing credit, funding, liquidity, operational, regulatory, ESG, and emerging artificial intelligence risks. The company’s executive remuneration is closely aligned with financial and ESG performance, with increased short-term variable remuneration targets and partial vesting of long-term incentives reflecting the company’s strong results.

Employee engagement and diversity remain priorities, with Pepper Money reporting a workforce comprising 53% women and 49% female representation in senior management roles, leading the financial services industry.