Major credit union Gateway has reported a 72.46% increase in pre-tax profit backed by strong growth in its home loan book.
Gateway’s housing portfolio increased 7% over the 2015 financial year, according to the credit union’s annual results released this week, representing growth of 0.9 times system growth.
According to Gateway chief executive officer, Paul Thomas, brokers are consistently responsible for a large proportion of the credit union’s home loan growth.
“The reality is if you look at our growth since we joined the broker market in 2009, Gateway has easily surpassed system growth year-on-year,” Thomas told Australian Broker
“One year we actually got up to 3.5 times the system growth. So, 7% growth this year was certainly strong against system growth, but we did deliberately have to throttle back because of some of the constraints put on us by regulators.
“A large proportion of our growth in home loans comes through brokers and that will continue to be the case.”
Looking ahead, Thomas said increasing competition in the lending market will be its biggest challenge.
“I think you will find that credit providers like Gateway will be competing with a range of other credit providers for a diminishing pie over the coming year,” he told Australian Broker
“That simply means we are going to have to work very hard and we are going to have to have sharp prices. The market is going to start to see discounting and special offers because there are only going to be a finite number of borrowers out there and every institution is going to want them to pass through their doors.
“So my only summation is – and I can’t believe I am saying this because I never thought the market could get more competitive – but I think it is going to be even tougher in 2016.”
However, Thomas did reveal plans to further strengthen its relationship with the broker channel over the coming year.
“In the not too distant future we will be making an announcement because we are absolutely committed to the broker channel. It will be a very clear and tangible demonstration of our commitment to the channel and will further cement our footprint and relationships with brokers,” he told Australian Broker