National Australia Bank partners with fintech lender Plenti
The National Australia Bank (NAB) has entered into a five-year “strategic partnership” with Plenti, whereby the fintech lender will receive at least AUS$3m (£1.6m) a year.
The bank may also acquire up to 15 per cent of Plenti over time, on the achievement of certain milestones.
The two Australian firms are planning to launch a co-branded secured car and electric vehicle loan product. The loans will be funded by NAB and held on the bank’s balance sheet.
And select Plenti renewable energy finance solutions are set to be made available to NAB’s customers in 2024, amid growing demand for eco-friendly products.
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“We’re excited to launch our first products with Plenti next year, and we look forward to working with Plenti to explore ways to expand the strategic partnership further,” said Paul Riley, executive, personal everyday banking at NAB.
“The use of electric vehicles and environmentally sustainable products in the household is becoming more common in Australian homes and we’re keen to support our customers transition to a low emissions future.”
Under the terms of the deal, Plenti will receive an upfront payment for operational set-up; an upfront fee per loan funded, which steps down once the loan book reaches AUS$1bn; and a monthly servicer fee calculated as a percentage of the loan book, which scales down as the loan book grows until the loan book reaches AUS$3bn.
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The agreement has an initial term of five years with the ability to extend for a further five years.
“The economics for Plenti will depend on the level of originations and loan book achieved over time,” Plenti said. “Indicatively, annual revenue for Plenti in a year with originations of AUS$500m and an average loan book of AUS$1bn would be approximately AUS$20m.”
The timeframe to reach this annual revenue depends on the success of the new car loan offering.
Plenti said it will receive a minimum annual revenue under the strategic partnership of AUS$3m.
“Together we see an opportunity to better serve new and existing customers with car and renewable energy lending products and we’re excited about the potential for future expansion of the strategic partnership over time,” said Plenti’s founder and chief executive Daniel Foggo.
“This strategic partnership is expected to have a meaningfully positive impact on Plenti’s growth and profitability in future years.”
Plenti rebranded from RateSetter Australia in 2020, having been set up initially as a subsidiary of RateSetter UK, the peer-to-peer lender which was bought by Metro Bank. It floated on the Australian stock exchange later that year.
Its total loan portfolio was valued at AUS$2bn as of 30 September 2023.