Company Interview / Solvar rebuilds lending engine as growth and credit quality return | TIP Emerging Wealth Winners

Solvar (ASX: SVR) has completed a major multi-year reset, exiting New Zealand, resolving regulatory challenges, and rebuilding its lending and governance framework. CEO Scott Baldwin says the business is now moving from repair mode back into growth, with credit quality and underlying performance showing clear improvement.

Baldwin says the company has spent around three years restructuring operations following regulatory scrutiny from ASIC and legacy issues across parts of its business. This included tightening credit policies, revising compliance frameworks, and refining customer targeting. He says these changes have strengthened the business materially and reduced risk.

Recent performance suggests early signs of recovery, with the latest quarter delivering the strongest growth in over a year and underlying bad debt levels stabilising within a long-term range of roughly 3.5% to 4.5%. The group now operates three core lending brands targeting distinct segments: Money3 (used vehicles), AFS (upgrade and lifestyle borrowers), and Benji (small business lending), which has scaled rapidly from $1m to over $30m in receivables in a year.

A new $488 million warehouse funding facility has improved funding diversity and reduced funding costs, while also insulating the business from previous reliance on single offshore funding sources. Baldwin emphasises this diversification as a key structural improvement.

Dividend policy remains a key focus, with a sustainable half-year payout of around 6 cents per share, supplemented by special dividends tied to the winding down of the New Zealand loan book. Longer term, payout ratios are expected to normalise at 70–90% of earnings.

With regulatory overhangs easing, improving credit metrics, and a return to growth momentum, Solvar argues the business is now positioned to rebuild earnings and re-rate, supported by a large underpenetrated $100bn+ vehicle finance market and ongoing structural shift away from bank lending.