Pepper CEO speaks as profit guidelines revised upwards

by Mike Wood25 Nov 2021

Pepper Money CEO Mario Rehayem has paid tribute to the broker channel after the non-bank revised their profit expectations upwards for the 2021 calendar year.

Pepper announced on Thursday morning that they were expecting to make around $138m NPAT in 2021, around $18m more than they had told the ASX at the time of their IPO in May.

The news sent their stock price spiking upwards, adding 4.55% in value over the course of the day. CEO Mario Rehayem spoke to Australian Broker to explain how the non-bank was able to post such strong numbers.

READ MORE: Major SME non-bank to pivot to offer home loans

“It’s our ability to take advantage of the opportunity that was presented to us in 2021,” said Rehayem.

“That was around mortgage originations, asset originations and our ability to flexi not our prime and non-confirming stable of products, as well as our natural ability to continue to drive a strong focus around profit. The reason behind it is our ability to originate loans to a wider segment of the market.”

“We’re still heavily focused and embrace the level of volume that we have obtained from the broker market. Roughly 95% of our volume is introduced via the broker market.”

“It’s something that we’ve worked very hard on in the 25 years that we’ve been part of the mortgage broker third party division. It’s around brokers trusting Pepper.”

“The reason brokers trust us is that we give consistent, market-leading turnaround times and consistent credit decisioning, so they feel confident in recommending Pepper with knowing that there isn’t going to be a surprise at the eleventh hour.”

“The other aspect is how we treat their customers right through the journey of the loan with us. We don’t just offer a great service upfront, but we offer it through the whole life of the loan with their customer.”

“Brokers feel comfortable when they’re interviewing their customer that they can recommend Pepper because they know the deal will get set and they know that the customer will be looked after when the loan is settled.”

The mortgage part of the business represented the bulk of the growth, but the burgeoning asset finance division at Pepper Money was also responsible for over $1.6bn in originations and also posted above system growth.

“The asset finance business goes from strength to strength, and again, it’s because brokers trust us,” said Rehayem. “The time to yes is practically the touch of a button now and they know that we’re very transparent in our credit policies, so they have the utmost confidence that the deal will get set.”

“The way that our system operates is now integrated into their own CRMs, so they don’t have to double handle or double key information in. We’re integrated via an API and, at the touch of a button, all the information is populated straight onto an application form and sent through for an auto-approval.”

“There’s that fast time to yes and the level of effort needed to engage with Pepper is minimal. Again, the way that we treat customers post-settlement is so important for a broker.”