GreenSky eyes growth in health care, e-commerce loans

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GreenSky reported first-quarter revenue growth of 22% as it made progress in diversifying its lending business.

Revenue at the Atlanta-based consumer lender climbed to $104 million, up from $85 million in the same period a year earlier. Net income declined from $18.6 million to $7.4 million as a result of higher expenses.

GreenSky, which held its initial public offering in May 2018, offers point-of-sale loans to consumers through partnerships with retailers. The company initially focused largely on the home improvement industry, where many consumers are looking for a faster and easier approval process than is available on home equity loans, but it has recently been looking to expand its footprint in other retail sectors.


GreenSky’s bank partners, which take the loans onto their books, include Regions Financial, Fifth Third Bancorp, SunTrust Banks and Synovus Financial.

CEO David Zalik said during a conference call Tuesday that doctors, dentists, veterinarians and other health care providers represent approximately 10% of the company’s total monthly transaction volume. GreenSky reported that it partnered with roughly 3,500 health care firms during the first quarter, up from just under 1,500 a year earlier.

“We have tremendous runway to grow our market share within our existing industry verticals of home improvement and elective health care,” GreenSky Vice Chairman and Chief Administrative Officer Gerry Benjamin said during the call, adding that the company also plans to selectively expand in the specialty retail and e-commerce sectors.

Zalik said that consumer demand for home improvement projects remains very strong. But he also noted that a shortage of skilled labor in the tight U.S. labor market is hurting the ability of the company’s retail partners to keep pace with demand.

Its credit quality weakened during the first quarter. GreenSky reported that 1.31% of its loans were at least 30 days past due, up from 1.18% a year earlier.

GreenSky reaffirmed its financial guidance for fiscal year 2019, which includes projected revenue growth of 30% to 38%. The company indicated that the lower growth rate during the first quarter was attributable to the seasonality of home-improvement work.

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