AFG reports rapid asset finance growth

At its annual general meeting on Friday (24 November), the chair of the group, Greg Medcraft, flagged that asset finance settlements had “nearly doubled from the previous year” and that the group “see[s] significant growth continuing in the coming years”.

According to the group, AFG brokers settled $2.6 billion in asset finance in FY23.

The combined residential and commercial loan book increased by 7 per cent to $206.5 billion, with a residential loan book of $194.5 billion and a commercial loan book of $12 billion.

The group noted that Fintelligence – the asset finance aggregator that AFG owns a 75 per cent stake in – recorded a 49 per cent increase in settlements in FY23, making it one of the fastest-growing asset finance aggregation businesses in Australia.

Since acquiring 75 per cent of Fintelligence in December 2021 (with the group still have an option to acquire the balance), asset finance broker numbers have more than doubled, and monthly settlements increased from $68 million to $312 million for the combined group at the end of FY23.

It settled more than $200 million in FY23 alone.

According to AFG, the growth stems from its understanding of the changing needs of asset finance brokers, marrying technology, experienced personnel and a broad range of funders together.

Speaking to The Adviser about the growth, Chris Slater, the newly appointed chief executive of Fintelligence, said: “I’ve had the pleasure of working in some excellent businesses inside the AFG Group over the last 16 years, and this is the most exciting one I’ve had the opportunity to work with.

“The expertise in the team is exceptional, and the technical capability of the platform is amazing.

“The fact the business is only four years old and already has 650 brokers on it is a real testament to the team, and we look forward to sharing the experience with as many brokers in the asset finance industry as we can.”

AFG is currently piloting a spot and refer model, which it said was “ready to scale”.

The spot and refer model is largely for AFG brokers who prefer to focus on their residential lending businesses. However, the group noted that many of AFG’s residential brokers have established dedicated asset finance businesses now operating under the Fintelligence umbrella, providing diversification opportunities.

It also has future white-label options in technology and products for the group.

Mr Slater continued: “When you think about AFG’s capability to manufacture and distribute white-label products in the residential and commercial space, the opportunities in the asset space are really exciting.”

AFG said it will be launching a new version of the Fintelligence platform, Ambition, early next year – which aims to update the cloud system with better automation, customisation, communication, connectivity and the use of AI.

In his speech at the AGM, AFG CEO David Bailey commented: “On the back of a strong balance sheet supported by reliable cash flow, our people are focused on continuing to deliver on our strategy – to consolidate and grow our distribution network; to leverage our distribution strength to deliver higher margin growth; to harness technology to be more agile, competitive, and profitable; and to build on our foundations of support for our broker network in delivering choice, convenience and competition.”

The aggregator has been looking to broaden its diversification offering as mortgage growth softens.

Indeed, several groups have been bolstering their commercial and asset finance offerings in the past year as new home lending drops and the higher margins of asset and commercial lending grow more attractive in a changing economic environment.

COG Aggregation acquired asset finance businesses NFC and United Financial Services earlier this year, LMG recently bolstered its asset finance team, and two new aggregators dedicated to asset finance, Viking Aggregation and Compass Aggregation, have launched in the past few months.

[Related: New aggregator launches to ‘shape the future’ of asset finance]