Resimac foresees mortgage headwinds in FY23

In Resimac’s latest trading update, competition for home loan originations, especially in prime where cashback incentives and low rates are dominant, has continued in 1H23. The non-bank lender also stated that home loan settlements from July–October 2022 had hit $1.8 billion.

Earlier this year, the non-bank lender’s book rose above $15 billion for the first time after it saw record settlements of $6.3 billion in the financial year 2022. As of 31 October 2022, prime home loan assets under management (AUM) were at $8.9 billion and specialist home loan AUM was at $6.1 billion.

Resimac’s financial results for the year ended 30 June 2022 revealed a record year in home loan settlements following a 30 per cent increase.

The non-bank attributed high demand for its specialist offering, which was largely prime alt doc loans for customers who struggled during the pandemic but have recovered since as the driving force behind the $6.3 billion figure.

In addition, the non-bank’s asset finance settlements from July–October were $135 million, with asset finance AUM as of 31 October 2022 sitting at approximately $480 million (up from the $400 million reported on 30 June 2022).

The non-bank had also reported that it had restructured its asset finance funding programme and launched a new loan origination system since 30 June 2022, and “remains committed” to reaching a target of $1 billion asset finance originations by FY24.

Resimac chief executive Scott McWilliam stated: “The first half [of FY22] saw a record low cash rate driving fierce competition, especially in the fixed rate market. The second half saw a rapid monetary tightening cycle fuelled by inflationary concerns, which was continued through to FY23.

“We are pleased to report continued strong growth in assets under management in FY22, including growing our home loans portfolio to more than $15 billion for the first time, while ensuring the best possible returns for shareholders.”

Mr McWilliam further stated that Resimac “continued to lay the foundations for future growth” going into the new financial year.

“We made substantial progress on overhauling our core banking systems including rolling out a new originations platform,” Mr McWilliam stated.

“These upgrades are providing faster turnaround times and greatly improving the front- and back-ends experience for brokers and customers.”

[RELATED: Resimac portfolio surpasses $15bn after record year]

Written by Adrian Suljanovic

Last Updated: 16 November 2022

Published: 16 November 2022