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Southern Cross loan book nears $225 million

Peer-to-peer lender Southern Cross Partners expects its loan book to reach $225 million in the year to March, an increase of nearly 50% on 2019.

Monday, February 24th 2020, 2:55PM

The lender forecasts significant growth in its lending book as rivals including Harmoney drop out of the P2P market. The company underwrote loans worth $150 million in the year to March 2019. 

Southern Cross CEO Cliff Carr said New Zealand investors still had a strong appetite for peer-to-peer lending, and retail backers were “snapping up loan opportunities within minutes of posting”.

“There is no shortage of investors eager to participate”, Carr said. “Loans put on the investor platform are sold within minutes. Even a multi-million-dollar loan can sell quickly as investors are continuously looking for a better return on their funds than what’s on offer from mainstream banks.”

It comes after P2P specialist Harmoney dropped out of the peer-to-peer sector this month, in favour of using wholesale funding. Rivals including Squirrel Money have stepped in to offer P2P opportunities to investors.

Carr claims the peer-to-peer market will continue to thrive as investors seek yield on their investments.

“We’re being told by our investors that due to a number of factors in the market, such as softening interest rates, people are looking elsewhere for returns. The rates banks are offering to those with money to save have been steadily diluted to the point where it is challenging to find a return that starts with a three,” Carr added.

Southern Cross will stick to secured loans as it seeks to grow its loan book further in the 2021 financial year. 

“Our model shows that the way forward for peer-to-peer is secured rather than unsecured. Our investors tell us that this is an important factor. Risks can be minimised by the security we offer together with Southern Cross Partners assessing and managing the loans closely – that’s our role,” Carr added.

Tags: Harmoney P2P Peer to Peer Lending Southern Cross Southern Cross Partners

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
SBS Bank 4.54 3.05 3.19 3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.55 2.69 2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.15 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.00 3.13 3.02

Last updated: 21 September 2020 10:48am

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