One of Australia’s biggest non-bank lenders, Resimac, has announced strong results for the last half-year period.
Profits were $50.5m for the second half of 2020, representing a significant bounce back after the COVID-19 pandemic. The Resimac board was able to declare an interim dividend of 2.4 cents per ordinary share, double where they were in the first half of 2020 at the peak of the pandemic.
They cited a 14% rise in home loan assets as a significant factor in their success in the latter half of the year.
“Our reaction to the pandemic is something that we’re extremely proud of,” said Scott McWilliam, chief executive officer of Resimac. “We offered a payment deferral to all of our customers at the start of COVID, when there was obviously a lot of panic and uncertainty in the market. We are obviously pleased that the percentage of customers that require assistance going forward has significantly reduced.”
“In terms of what we’ve done as an organisation: we’ve not drawn on Jobkeeper and we broadly have the same employee count today so we didn’t look to cut costs within the business. What we did do is restructured parts of the business to make sure that we had sufficient resources to manage areas where there was activity.”
It wasn’t all plain sailing, said McWilliam. “Obviously, managing a large portion of your book that is looking for financial assistance requires people so during that period we were able to second the people into the areas where there was heightened activity and away from other areas where there might have been a reduction in activity.”
“Just as important, we also didn’t reduce our lending to brokers in the market. We were one of very few non-banks that continued to put strong products and good credit into the market, distributed through brokers, and that’s another thing that we are enormously proud of.”
Despite the general rise in uncertainty provoked by COVID and the ensuing economic crisis, McWilliam said that the growth in the non-bank sector was not due to the pandemic.
“Let’s talk more broadly about the market share increase for non-bank and alternative lenders in the market,” he said. “That momentum and that increase has been happening over time, helped along by the Royal Commission.”
“In terms of COVID, everyone was affected whether you were a major bank or a non-bank. But the opportunities going froward are bright for all lenders. When you think about the buoyant property market out there, the quality of applications is improving over time and the number of deferrals are significantly decreasing across the board for all lenders.”