Liberty relishes freedom to grow

by Antony Field01 Feb 2021

After a hectic 2020 featuring the coronavirus, new products and a public listing, non-bank lender Liberty is set to build on its successes over the coming year.

There's no doubt 2020 was a momentous year for Liberty Financial Group.

Not only did the non-bank lender move quickly to help customers who were struggling through COVID-19, but it also launched two new business lending products for SMEs and created a new position of national sales manager to further support its broker channel.

In addition, Liberty rolled out digital verification of identity options to improve the customer experience and help brokers keep up with increased demand.

But the biggest development came on 15 December when Liberty listed on the Australian Stock Exchange at a share price of $6, with a market capitalisation of about $2bn. Since then, the price has risen steadily, with Liberty shares edging towards $8 at the time of publication.

Building on solid loan growth and its partnership with fintech personal loans specialist MoneyPlace, Liberty is confident about further gains in 2021.

Reflecting on 2020, CEO James Boyle says Liberty demonstrated its reliability and strength as well as its unwavering dedication to the financial wellbeing of its business partners and customers.

“This year has highlighted the importance of connections and community,” Boyle says. “I’m grateful for the community of business partners and Liberty team members. Our partners and our team have worked tirelessly to support customers through the challenges and opportunities this year has brought.

Liberty: The numbers“We have been true to our purpose of helping people get and stay financial.”

From the rapid implementation of new technology, such as digital VOI, to the launch of bespoke solutions for SMEs, Liberty has “gone the extra mile to ensure smooth continuity of service to brokers and customers alike”, Boyle says.

Melbourne-based Liberty offers home, car, business, SMSF and personal loans, and has advanced more than $30bn in funds to more than 600,000 customers.

When it comes to its IPO, Boyle says Liberty has always been guided by what is best for its business partners and customers.

“If we get this right, the rest will take care of itself.

“Our listing on the Australian Stock Exchange is no different, in that Liberty’s access to equity capital markets will expand and strengthen our ability to serve brokers and customers.

“Combined with our strong debt markets capabilities, we are well positioned to advance our agenda of industry innovation and support.”

Boyle says that as a listed company Liberty will retain all the unique and free-thinking aspects of its offering that brokers have come to love and expect – personalised service, access to underwriters and swift turnaround times.

“Our new shareholders join us with the confidence that we will continue to do business as usual, with the same approach that makes us one of Australia’s top lenders,” he says.

“I’m excited about the new opportunities that lie ahead and am pleased to invite and welcome any new shareholders to join us on this meaningful journey.”

Reflecting on Liberty’s growth over the past 23 years to become Australia’s only non-bank with an investment-grade rating, Boyle says the focus remains on “helping people from all walks of life to get financial”, whether they are prime, near prime or custom borrowers.

“Our flexible approach to lending has led us to help more than 600,000 customers.

“From our roots in residential mortgages, we’ve grown organically, innovating to meet the needs of customers. Today, we offer a broad range of solutions for a wide range of customers, including those who are not well served by traditional financial institutions.”

Liberty believes in providing personalised service, with a team based in Australia to help more Australians with their needs. The Liberty Financial Group also extends to New Zealand, with local advisers and service staff available to support Kiwi customers.

Boyle says Liberty has expanded over the years beyond residential mortgages into adjacent markets, including motor finance, commercial mortgages, personal loans, business loans, SMSF loans, broking services and general insurance.

“Our consistent organic growth has been bolstered by strategic partnerships and acquisitions, including nMB, ALI and MoneyPlace in the past three years.”

As Liberty has expanded, Boyle says, so too has its ability to support business partners with a wider range of solutions and services.

Liberty’s “consistently strong” financial performance, which saw it continue to write loans through the GFC and the peak of the pandemic, is due to the lender’s customer focus, diversified business and capital management expertise.

“We’ve maintained high levels of customer satisfaction, with a Net Promoter Score of 46.

“We’ve also consistently held the capital generated by the business on balance sheet to make sure we are a sustainable business that can help business partners and customers through the cycle,” Boyle says.

“That’s reflected by our investment-grade rating.

“Even though we know there will continue to be ups and downs, brokers can always count on Liberty doing its best.”

Diversification and providing flexible solutions for its customers are important at Liberty.

“Right from day one, we’ve worked to break down barriers, support financial inclusion and create even more opportunities through diversification,” Boyle says.

“We’ve taken steps to broaden our solutions to help more customers. So now we have one of the most diverse and inclusive financial product ranges in the market.”

To provide even more support for its increased salesforce and team of BDMs, Boyle says Liberty also appointed a new national sales manager, Sof Tsialtas.

Earlier in 2020, Liberty became the first non-bank lender to sign up to the Financial Inclusion Action Plan (FIAP). The FIAP program, says Boyle, includes an agreed set of actions to support financial inclusion, wellbeing and resilience in Australia, and aligns closely with Liberty’s mission to help more people “get financial”.

“Just as there is no one-size-fits-all approach to our loan solutions, a diverse workforce and partnerships with charity and community organisations help us better place ourselves in the customer’s shoes.”

Liberty has also focused on small business customers, being one of the first non-bank lenders to join the federal government’s SME Guarantee Scheme by creating its Business Care solution. This has been extended with Liberty’s continued involvement in phase two of the scheme.

Business Care provides an unsecured term loan of up to $250,000 for a maximum of three years, with the option to defer repayments for the first six months with interest capitalised.

The SME Guarantee Scheme aims to help SMEs get through the impact of the pandemic by supporting up to $40bn worth of lending to SMEs, including sole traders and not-for-profits.

“The SME Guarantee Scheme has provided much-needed support for many Australian businesses who needed to quickly adapt to changes in the market,” Boyle says. “We witnessed how vital this support has been to many local businesses.”

Liberty also launched two of its own new business lending solutions for SMEs: Liberty Access and Liberty Mint. Liberty Access offers a flexible business line of credit up to $1m, while Liberty Mint provides secured business loans of up to $3m.

“Adding to Liberty’s already strong suite of business lending solutions, these products ensure that Liberty is equipped to provide SMEs with competitive solutions for a variety of needs.”

Many SMEs have been hit hard by the pandemic, Boyle says, with cash flow concerns a major issue.

“We know that many SME borrowers need the help of a specialist lender that offers flexible support. We are supporting an increasing number of brokers to find new ways to help SME customers access the funds they need to rebuild and thrive.”

Liberty also remains one of the few lenders to provide loans to self-managed super funds.

Boyle says Liberty continues to see the value to customers and brokers in offering SMSF lending solutions.

“As an area of lending that has been reasonably resilient amid the market fluctuations and challenges of 2020, we will continue to support both brokers and borrowers in this space.”

SMSF lending also provides a significant opportunity to diversify and strengthen a broker’s business, and Liberty is helping brokers and business partners add this valuable skill to their loan offering.

The best interests duty came into effect on 1 January, requiring mortgage brokers to act in the bests interests of their customers.

Liberty’s BDM team has been working closely with brokers to help them prepare for the new regulations and understand their responsibilities.

Boyle says BID and the related ban on conflicted remuneration are significant changes, and there is a lot of information about the new rules available to brokers.

“We’re dedicated to providing the compliance support needed to help brokers meet their new obligations,” he says.

When talking to brokers about Liberty’s lending solutions, Boyle says customers also want to know more about the interests of the businesses they are dealing with.

“When a broker talks to a customer about Liberty products, they can also inform them of our turnaround times, custom approach to lending solutions, and our social responsibilities.

“We know that customers want to work with companies who are serious about their wider corporate responsibilities, so our business partners can be confident with Liberty that they are working with a lender dedicated to its role in the broader community,” says Boyle.

“Last year we became the first non-bank in Australia to become a B Corporation. B Corporations are businesses that commit to meet high standards of social and environmental performance along with their financial objectives,” he explains.

A free-thinking approachBoyle says Liberty has supported the improvement of financial inclusion among Australians for 23 years.

“We have pledged to continue to strive for improvements in areas such as sustainability.

“We’re committed to pursue not only an economic but also a socially responsible agenda – for our customers, our employees and our planet. Liberty’s accreditation as a certified B Corporation is consistent with these principles.”

Looking to the year ahead, Boyle says brokers can certainly expect to hear more from and about Liberty.

“Just as we have done this year, investment in our brand and profile will continue as we expand our sponsorship and social media presence.”

The Melbourne Renegades principal partnership Liberty signed on to for the 20/21 WBBL and BBL cricket season “was exciting for us, helping to strengthen our brand with a club whose values are very closely aligned”.

“By doing so, we hope to connect with the many customers and small businesses who we can help with our free-thinking approach.”

Efforts to increase consumer awareness are also intended to help Liberty’s business partners.

“We hope that this brand awareness boost will mean less time spent by brokers explaining who we are, and more time focusing on customers’ finance needs.”

In 2021, Boyle says brokers can also expect to see continuing strong performance by personal loans partner MoneyPlace.

“Entering the third party distribution channel for the first time in 2020, we’ve seen an incredible 82% increase in settlements in the past six months alone.

“MoneyPlace has grown during the pandemic, bringing on more BDMs and lending specialists.

“The bottom line is that we’re incredibly grateful for the support of our business partners, and we will continue to invest in the network that helps create shared success.”

Boyle believes the federal government has done a world-class job in managing the health and economic consequences of the global pandemic.

“So provided the impact of the vaccine and our trade relations with China are positive, we think there’s a good basis for us to be optimistic about the Australian economy in 2021,” he says.

“All that said, we appreciate there are many small businesses that have been and are continuing to be radically impacted by the pandemic, and we are hopeful that they will start to see customers return and business improve in line with these trends.

“As for Liberty, we will continue as we have for 23 years – to focus on providing a broad range of innovative finance solutions so that our business partners can help more customers get and stay financial.”