FirstMac posts strong results

by Adam Smith01 Nov 2011

FirstMac has posted a strong full-year profit, and claimed its results prove banks can move further on interest rates.

The lender reported a net profit after tax of $9.5m for the year, up from $1.4m last year. The company put the result down to a "conservative balance sheet funding program, healthy net interest margins and a well-maintained distribution network".

Loans and advances decreased 2% over the year to $4.4bn, with new originations broadly equivalent to discharges, but the company forecast loans and advances to increase over the next financial year due to increasing origination levels. FirstMac managing director Kim Cannon said the company's launch of has generated strong demand, and brought increasing settlement.

Cannon challenged banks with the result, reporting strong net interest margins despite lower rates.

"FirstMac provides the proof that it is possible to offer home loan products with competitive interest rates and also maintain a healthy net interest margin. If we can do this, it is possible for all lenders to do," Cannon said.

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