Chief executive Mario Rehayem says this reflects “our ability to continue to deliver scaled growth.”
The HSBC book “is a highly performing portfolio with virtually no loss history.”
The purchase was announced in September last year after HSBC announced it would withdraw from both the wealth management and retail banking markets in NZ because these were small scale amid an increasing amount of regulation.
The HSBC book had about NZ$1.4 billion in mortgages.
It was one reason Pepper's loans and advances rose to A$18.38 billion at Dec 31 from A$18.33 billion a year earlier.
The company reported a 23% decline in net profit to A$108.7 million for calendar 2023, which reflected a 43% drop in mortgage origination and a squeeze on margins because of higher funding cos5ts and customer contrition.
Although Pepper has operated in NZ since 2019, it doesn't disclose its NZ results separately.
The results showed the company reduced full-time equivalent employees to 863 from 1,081 at June 30 and 1,114 at Dec 31, 2022.
Mortgage origination fell to A$3.9 billion for the year, but originations in the second half were up 28% on the first half.
Mortgage assets under management reached A$12.6 billion, down from A$13.5 billion in 2022, reflecting the difficult macro-economic conditions and “intense competitive environment,” the company said.
The environment had a marked impact on Pepper's loan mix with non-conforming lending rising to 63% of originations from 48% the previous year and prime loans falling to 37% from 52% in 2022.
The company grew its asset finance originations 21% to a record A$5.7 billion in the latest year.
Rehayem says the results show “our disciplined approach to knowing when to focus on growth and when to manage for value.”
The environment remains “uncertain” but Pepper will continue to respond and adapt, including “continuing to find ways to help our customers navigate difficult economic conditions.”
The company raised A$5.4 billion from seven public term securitisations during the year and remained well-funded to support future growth with unrestricted cash of A$121.1 million at year end.
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