Will Plenti's share price rise on NAB energy partnership?

Fintech platform Plenti has seen its share price surge on the back of a partnership with NAB to drive clean energy growth.

The share price of ASX-listed fintech Plenti (ASX: PLT) recently received a boost from a strategic partnership with one of Australia's big four banks to drive clean energy lending.

The deal with the National Bank of Australia (NAB) could help Plenti to find opportunities in mounting concerns over climate change and the increasing importance of the renewable energy and electric vehicle markets.

NAB could also emerge as a significant investor in Plenti, thanks to a conditional equity investment agreement.

Plenti teams up with NAB on clean energy credit

At the end of November, the National Australia Bank (NAB) announced it had entered a strategic partnership with Plenti to offer co-branded loans to automotive and electric vehicle consumers.

The 'NAB powered by Plenti' car and electric vehicle loan is scheduled for launch at some point during the second quarter of 2024.

The partnership will also see NAB promote Plenti's renewable energy finance options to customers.

Plenti will be responsible for processing loan applications, performing credit assessments and ongoing loan and customer management, while NAB will fund loans and retain them on its own balance sheet.

News of the deal with NAB helped to drive a 66% intraday surge in Plenti's share price on 28 November, the date of the announcement.

The partnership arrives amidst growing concern over the impacts of climate change amongst consumers, which is helping to drive increasing demand for electric vehicles in Australia.

Figures from the Australian Automobile Association indicate that a total of 87,217 electric vehicles were sold around the country in 2023, for a 161% leap compared to 33,140 units sold in 2022.

NAB poised to become significant Plenti investor

In addition to the clean energy deal, NAB and Plenti could further deepen their partnership thanks to an equity investment agreement.

Under the agreement, NAB could obtain an equity stake of as high as 15% in Plenti contingent upon the completion of key milestones.

NAB can make a purchase of up to 5% of Plenti's shares during the 18-month period following the launch of their co-branded automobile and electric vehicle loans.

Additionally, NAB has the right to acquire a further 10% of Plenty's equity via two placements with minimum prices of 90 cents and $1.20 a share.

Plenti chief executive Daniel Foggo said the partnership with NAB would enable the two companies to derive mutual benefit from their complementary advantages, as an established financial institution and an upcoming fintech platform.

'This is a very logical partnership that brings together a large player that's got a lot fantastic attributes including a large customer base and a very strong balance sheet with business like ours which is able to move quickly,' Foggo said.

'We're excited about the potential for future expansion of the strategic partnership over time.'

Plenti's loan portfolio expands 29% in H124

Launched in 2014, Plenti is an online lender that makes use of proprietary technology to offer automotive, renewable energy and personal loans to Australian consumers.

As of the end of H124, Plenti's loan portfolio stood at $2.0 billion, for a 29% increase compared to the previous corresponding period (PCP).

Loan originations were $624 million for the period, marking a 12% increase on PCP, while half-year revenue was $97 million, for a 52% leap.

Plenti's credit performance held solid, with a net loss rate of 0.99%.

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