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Liberty Financial raises broker investment as book swells

by Sarah Simpkins6 minute read

The ASX-listed group has ramped up investments in broker support staff and technology, as it has seen its loans grow by 5 per cent.

Liberty Financial Group posted its 2021 financial year results on Monday, recording a 38 per cent rise in net profit after tax (NPAT) year-on-year, to $185.4 million, while net revenue came to $600.1 million (18 per cent more than the previous year).

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Factoring in costs associated with its initial public offering (IPO) and increased staff of $12.4 million and $20.1 million respectively, underlying net profit after tax and amortisation (NPATA) came to $226 million – a 61 per cent hike from the year before.

The group’s total gross loans grew by 5 per cent, to $12.3 billion – with a 17 per cent increase in new loans, to $4.1 billion.

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The majority of the portfolio (71 per cent) was occupied by the residential lending business, which generated a profit of $164.5 million, up by 53 per cent year-on-year.

Meanwhile, the financial services segment, which includes the group’s SME and personal lenders, as well as its aggregators (Mike Pero Mortgages, Liberty Network Services and National Mortgage Brokers) produced a profit of $27.8 million, up by 66 per cent year-on-year.

The company noted a 31 per cent rise in commission income to $142 million, following on from more brokers being recruited to the Mike Pero Mortgages, Liberty Network Services and National Mortgage Brokers aggregation networks and raised loan originations.

Liberty Financial chief executive James Boyle told The Adviser the group’s overarching results were a “reflection of the phenomenal work that the broking community has done”, through COVID.

“We saw a nearly 20 per cent increase in the amount of business written year on year through the broking channel, it’s by far, the main way that we help customers, via brokers,” Mr Boyle said.

As mentioned before, the company has invested in more staff, having a total of 490 employees at the end of FY21 compared to FY20’s 434. Mr Boyle reported the additions had included increased support staff for brokers in the lending arms, with a total now of around 70 business development managers (BDMs).

“I think one of the frustrating experiences of the broking community over the last year was that a lot of lenders were not able to maintain their responsiveness and for us that’s been super important,” Mr Boyle said.

“We really try and make sure we can be super quick and super responsive to brokers, not just in our sales team, but also in our head office team. We’re invested to make sure we maintain those standards.”

Further to additional support staff, Mr Boyle commented the company will continue to invest in new products and in technology.

In the past year, Liberty Financial has made moves on automating the manual review work for loan applications in the broker portal.

The group has also signalled plans to expand its auto finance solutions, with Mr Boyle telling investors the group will look at pursuing more business from motor dealerships.

He stated the group had sourced around 80 per cent of its auto loans business through brokers, while the remaining 20 per cent came through dealers.

In the secured finance segment, which covered the company’s offerings in vehicle, commercial and self-managed superannuation fund lending, profit for FY21 came to $150.7 million, surging by 60 per cent year-on-year.

“We certainly have the most diversified product suite available to brokers from one non-bank lender, so whether brokers are helping customers with home loans or SME loans or commercial secured loans or personal loans, mobile loans, or even self-managed super fund loans, we’re able to help them,” Mr Boyle said.

“Our team are here to really help brokers that perhaps be operating in one area of expertise and wanting to diversify out, to help customers in different ways.”

Looking ahead, the group has maintained a cautiously optimistic outlook – noting conditions are better than comparable periods in 2020, but the “environment for customers of course remains uncertain”.

Customers impacted by COVID slimmed down to 0.7 per cent of the group’s portfolio, as at 30 June – compared to 9.7 per cent the year before.

[Related: ‘Brokers’ strong relationships’ lead to record FY21: AFG]

Liberty Financial raises broker investment as book swells
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Sarah Simpkins

Sarah Simpkins

AUTHOR

Sarah Simpkins is the news editor across Mortgage Business and The Adviser.

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