It held its second spot in the sizeability stakes for non-bank lenders overall and and once again produced strong growth figures.

This information came in the latest annual KPMG Financial Institutions Performance Survey (FIPS), which looked at 26 financial institutions.

Of its surveyed companies, FIPS found finance company net profit after tax (NPAT) growing by 56.82% in the year to September, substantially ahead of still robust growth reported for mainstream banks nine months ago. 

Avanti's total loan book reached $2.07 billion, up from $1.54 billion in the previous year. That represented a growth rate of 34%.

The biggest loan portfolio remained with industry leader UDC Finance, at $3.54 billion. The remaining spots in the top five went to Latitude, on $1.4 billion, First Mortgage Trust, with $1.17 billion and Toyota Finance on $1.02 billion.

In commenting further on Avanti, the FIPS report said its success was due almost entirely to the growth of its loan book, which had been a comparatively small $153 million just seven years ago.

Looking at the 26 survey participants overall, the growth in profitability was varied. Eighteen of them experienced rising NPAT. Latitude experienced a 144% growth in NPAT. Of the decliners, Unity Credit Union fared worst.

The peer-to-peer lender Harmoney produced notable results. It was the fastest growing of the 26 firms represented in the survey, more than doubling in size. But it still made a loss of $20.18 million, although that was a big improvement on the previous year's loss.

One of the key ingredients of finance company profitability is net interest margin (NIM). Overall, this rose slightly from 6.59% to 6.62%, when companies with uneven reporting years were excluded from the calculations. FIPS pointed out that this growth in margins was achieved despite a fast rising official cash rate (OCR).

Avanti's NIM fell slightly – those of Latitude, First Mortgage and Toyota rose. UDC's figure was distorted by a non-comparable reporting date.

In terms of asset quality, FIPS found the non-bank sector showing strong improvements. This was because less money had to be put aside for impairments.

Twenty three of the 26 survey participants disclosed impairments, and only four of them had to pay more – the rest paid less. This trend reflects a movement across in the end than had been feared.

As a result, many institutions which had set aside money to pay for a Covid crisis that caused less economic damage than had been feared, found the money was unspent and was later written back into the main accounts.

The company that fared best in this regard was Latitude. Harmoney fared worst, but its overall impairment number was being viewed in the context of the large leap in the size of its book.

The cost of running a finance company got more expensive, according to FIPS. This showed operating costs on average increased 11.43%, due mainly to inflation making everything much more dear. Turners had the largest increase in operating costs, while Latitude had the biggest fall.

FIPS also produced a swathe of figures assessing profitability of companies according to several different criteria. On the principle of underlying profit, Avanti made $50.16 million, First Mortgage Trust $67.05 million, Latitude 71.52 million and Toyota $34.76 million.