Harmoney Confirms $13m FY26 Profit Target on Loan and Margin Gains
Harmoney has reaffirmed its FY26 cash NPAT guidance of $13 million, propelled by robust loan origination growth, margin improvements, and operational efficiencies from its Stellare® 2.0 platform.
- Loan book grows 10% to $879 million
- Net interest margin rises 120 basis points to 10.3%
- Australian and New Zealand originations increase 19% and 53% respectively
- Credit losses stable at 3.8%, cost-to-income ratio improves to 18.2%
- Secured lending warehouse deal to support car loan expansion
Strong Loan Growth Drives Profit Confidence
Harmoney Corp Limited (ASX:HMY) has doubled down on its FY26 profit forecast, reaffirming a cash NPAT target of $13 million, a 128% jump from FY25. This confidence follows a 10% increase in the group loan book to $879 million over the first nine months of FY26, underpinned by a 19% rise in Australian loan originations and a striking 53% surge in New Zealand originations measured in local currency.
The company’s CEO David Stevens highlighted that the loan book growth is particularly impressive given the dampening effect of a weak New Zealand dollar, which is at a 12-year low. Despite this, the Australian loan book expanded 17% and the New Zealand book grew 9% in local terms. Stevens noted that the currency headwind has limited impact on profitability thanks to a natural hedge from the company’s predominantly New Zealand dollar cost base.
Margin Expansion and Operating Leverage from Stellare® 2.0
The platform’s automation continues to underpin Harmoney’s scalable model, enabling revenue growth to outpace operating expenses. This efficiency was a key driver behind the company’s earlier upgrade to FY26 guidance, as detailed in their strong first-half results showing a 31% cash return on equity and loan book growth of 9% overall, with 17% growth in Australia alone.
Secured Lending Warehouse to Fuel Car Loan Expansion
Harmoney is also accelerating its secured car loan product, which grew 19% year-on-year. To support this, the company secured a credit-approved term sheet for a secured lending warehouse from a Big-4 Australian bank. This facility will reduce funding costs and enable further expansion into the car loan market, starting with onboarding new car partners in New Zealand in 4Q26, followed by Australia.
With over $30 million in available cash reserves and total warehouse capacity exceeding $1 billion, Harmoney is well capitalised to sustain this growth trajectory into FY27. The company’s diversified funding sources include warehouses from three of the Big-4 banks and publicly rated asset-backed securitisations by Moody’s, reinforcing its funding stability.
Share Buy-Back Reflects Confidence in Equity Value
Reflecting confidence in its capital position and valuation, Harmoney extended its on-market share buy-back program for a further 12 months. The buy-back will operate within a 5% cap of total shares over the period and is managed by Ord Minnett Limited. This move signals management’s belief that the company’s shares remain attractively valued.
Harmoney’s approach to growth is closely tied to its proprietary AI-driven underwriting engine and customer flywheel, which drives repeat lending with minimal acquisition costs. This dynamic, combined with the secured lending warehouse and ongoing product innovation, positions the company to potentially accelerate profit growth beyond current guidance.
Investors may find it instructive to consider this update alongside Harmoney’s earlier half-year performance, which already demonstrated a significant profit upgrade and robust return on equity, reinforcing the company’s trajectory of scaling profitably through automation and strategic funding partnerships.
Bottom Line?
Harmoney’s reaffirmed guidance and strategic funding moves underscore its capacity to scale profitably, but currency volatility and execution of new lending initiatives will be key to watch.
Questions in the middle?
- How will ongoing currency fluctuations impact Harmoney’s New Zealand loan book profitability?
- Can the secured lending warehouse accelerate car loan growth as expected without increasing credit risk?
- Will the share buy-back program influence market perception and share price momentum over the next year?
