Brokers drive growth for non-bank lender

by Julia Corderoy25 Aug 2015
An ASX listed Australian lender has recorded a significant boost in home loan settlements, thanks to the strength of the third party broking channel.

According to its financial results released yesterday, non-bank lender Homeloans grew its total mortgage settlements to $1.79 billion in the year to June 2015, up from $1.56 billion in the previous year. The non-bank’s total loan book reached $8.09 billion, up 6% from the 2014 financial year.

Total branded (managed) mortgages recorded an increase of 23.7%, reaching almost $1 billion at June 2015. Non-branded (non-managed) mortgages recorded growth of 5.5%. 

The growth in settlements was driven by the strength of the broker channel, with a spokesperson for Homeloans telling Australian Broker that just over 90% of the lender’s business in FY2015 was originated by branded or non-branded mortgage brokers.

The non-bank’s growth in its mortgage book was also aided by its acquisition of Queensland-based Barnes Mortgage Management during the year, which had funds under management of $0.5 billion as at 31 December 2014.

According to Homeloans, since acquiring Barnes in February 2015, it has continued to grow its presence on the east coast of Australia.

Homeloans CEO Scott McWilliam says he expects continued solid growth in the non-bank’s mortgage portfolio.  

“Importantly, Homeloans remains in a strong position, with the positive trend in submission and settlement activity in H2 FY2015 continuing into FY2016. In addition, recent industry fragmentation has seen lenders moving to differentiate on policy and pricing, which should benefit Homeloans with its diversified funding base. 

“We remain actively focused on assessing and pursuing potential inorganic opportunities that would assist in diversifying and growing the business to the future.”

However, the lender saw its net profit after tax fall by 9.8%, from $6.3 million to $5.6 million, over the period.