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Homeloans has suffered a 14.1 per cent fall in profits due to the “very challenging mortgage lending market”.
The non-bank lender reported an underlying net profit of $3.4 million for the six months to 31 December 2013, compared with $4 million the year before.
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However, lending volumes increased 12.4 per cent after 1.8 per cent growth during the year before. Homeloans-branded loan settlements also rose by 9.8 per cent.
Chairman Tim Holmes said the lift in lending volumes was due to the growth in housing credit and an improved home lending market.
Mr Holmes also said Homeloans was facing strong competition from other lenders.
“This has included aggressive discounting in the broker space combined with enhancements to commission structures for third-party brokers to support volumes,” he said.
“Despite the competition, however, we see this as an opportunity for Homeloans. Our business model and sole focus on home lending enables us to be agile and [to provide] what the banks can’t.
“For example, we have increased our number of funding lines and, as such, continue to grow our product range to suit a wider range of lending policies and nearly all types of borrowers.”
Homeloans said it would enter into a wholesale funding arrangement with major shareholder Macquarie Bank, with a formal product launch planned for March.
