Pepper Money’s deal to align with its strategy
Pepper Money’s strategy to grow its capital-light servicing business has led to striking the RAMS home loan deal alongside KKR and backing it with phenomenal half year financials that show growing scale and ongoing progress across the business.
Pepper Money Limited (ASX: PPM)
Pepper Money Limited has started November with a major strategic move as it announced that a consortium including Pepper and KKR will buy the RAMS home loan portfolio from Westpac Banking Corporation of about $21.4 billion in mortgages as at 30 September 2025.
Pepper will hold legal title to the loans and will also act as the servicer which fits well with its focus on building a capital-light servicing business that provides annuity-style earnings.
This deal also shows how the company is using its scale and mortgage expertise to seize big opportunities.
The transaction still needs approvals including FIRB and the ACCC and is expected to complete in the third quarter of 2026 if conditions are met.
This deal comes after a great first half of FY25 as the company delivered $47 million net profit after tax in 1H25 with total originations rising 38% from the prior year and assets under management reaching $20.1 billion.
Operating income stayed solid at $185 million and operating efficiency improved with productivity rising across credit and settlements teams.
Pepper also strengthened its balance sheet by paying down debt and investing in technology so it can scale faster and serve customers better.
In 1H25 it also returned cash to shareholders through dividends and buybacks which has improved Return on Equity.
The company strengthened its capital position by retiring about $27.5 million of corporate debt in February 2025 and closing the half year with roughly $142.9 million in cash even after paying dividends.
The loan servicing platform has become an important engine for Pepper and this RAMS deal will push that further.
Pepper is now one of the strongest non-bank lenders in Australia backed by strong demand across mortgages and asset finance which brings a growing stream of capital light income.
As regulators clear the RAMS transaction and integration planning continues, Pepper looks like a key player shaping the future of lending and mortgage servicing in Australia.
(Source: Company Announcements)
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