Australian Finance Group has posted a 39% jump in full-year profit, crediting a broadening earnings base and record scale across its broker network for the result.
AFG reported FY26 net profit after tax of $49 million, up 39% on the prior year, with underlying NPATA of $54 million, up 33%. Both the group's distribution and manufacturing divisions grew earnings over the year, while improved efficiency lifted underlying return on equity to 23% and reduced the cost-to-income ratio to 55%.
AFG said roughly 90% of its earnings are now backed by recurring or diversified income streams, reducing its reliance on any single part of the business.
The broker network itself expanded to more than 4,300 brokers, now serving over 600,000 customers across more than 80 lenders.
AFG chief executive David Bailey (pictured) said the scale of that network was central to the year's performance.
"AFG's expanding network now spans more than 4,300 brokers serving over 600,000 customers across more than 80 lenders," Bailey said. "The broker channel reached 81% of the residential lending market in FY26, with one in nine Australian mortgages written by an AFG broker."
Distribution EBITDA rose to $71 million on the back of an 18% increase in residential settlements to $75 billion, while asset and commercial finance settlements climbed 19% to $4.3 billion.
Bailey said larger broker groups within the network are growing at two and a half times the pace of the broader market, a trend he attributed to AFG's ongoing investment in compliance, technology and broker support.
AFG's manufacturing division also delivered a strong year, with its loan book growing 30% to a record $7.1 billion and underlying ROE reaching 30%. Record term issuance of $2.2 billion and improved warehouse funding conditions helped lift the division's net interest margin to 125 basis points.
"The performance of our lending business was a real highlight, with substantial book growth and improved returns while maintaining disciplined credit settings," Bailey said.
Looking ahead, Bailey flagged a recent pull-back in residential lodgement activity as borrowers weigh up shifting tax settings, interest rate expectations and cost-of-living pressures but said underlying housing demand remains sound.
"Residential lodgements have softened since June as borrowers respond to changing tax policy settings, interest rate expectations, and household cost pressures," he said. "While this has led to more considered decision-making, underlying housing demand remains intact."
Bailey said refinancing activity, upgraders and client retention are likely to be key growth areas for brokers in FY27 as more borrowers reassess existing loans and lean on brokers to navigate a complex lending landscape.
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