AFG book rises 9% to $182.2bn

According to the ASX-listed aggregation group, the rise in settlements reflected strong growth in all states, with more customers upgrading and refinancing.

The group’s lending arm, AFG Securities, also saw settlements more than double in the year to $2.7 billion. The AFG Securities book was $4.8 billion at the end of FY22, up 41 per cent on June 2021.

According to the results, the 3,700-plus brokers operating under the group (including Fintelligence brokers) also settled $3.9 billion in commercial loans, up 67 per cent on FY21.

Commenting on the FY22 result, AFG CEO David Bailey said: “Approximately one in 10 Australian residential mortgages are now arranged by an AFG broker. 

“We remain confident that the role and value of brokers to Australian borrowers will become more important as their customers seek advice and adjust their finances as their economic position changes.”

He continued: “Since taking up the controlling interest in Fintelligence, the company has delivered $700 million in asset finance settlements and an earnings contribution of $3.6 million for H2 FY22. 

“This investment accelerates our opportunity to expand distribution and direct lending into the under-served asset finance market.” 

Mr Bailey also flagged earnings growth from its strategic investments in Thinktank (of which it has a 32.2 per cent stake) and BrokerEngine.

For example, he noted that Thinktank white label settlement volumes had increased by 84 per cent to $239 million in FY22, while BrokerEngine had seen 41 per cent growth in subscribers since its acquisition by AFG.

However, its financial results were hit with an impairment of $15 million from the closure of Volt Bank – which shuttered its doors earlier this year – as well as a $6.3 million impairment from “broker-related technology costs”.

AFG’s impairments therefore totalled approximately $21.3 million (after tax) in FY22.

However, Mr Bailey flagged that technology would continue to be a key focus for the group moving forward.

“These strategic investments have expanded our aggregation, technology, distribution and lending capabilities,” he said.

“Notwithstanding their financial contributions to AFG’s results, it is also a critical part of our strategy to deliver more products and services to our brokers, while reducing the digital friction,” he said.

“The integration and further development of these acquisitions, alongside our own technology, will undoubtedly present more challenges in the future, however, it highlights our commitment to continue to invest in opportunities for growth for our shareholders, our brokers, and our customers,” Mr Bailey continued.

Looking forward, Mr Bailey told investors that he believed strong refinancing activity and diversification into asset finance and commercial lending markets would help continue to “provide value and growth to the company”.

“The role that brokers play for a broad range of Australian mortgage borrowers, and increasingly as an important business partner for SME operators, points to an exciting future for the company,” the AFG CEO said.

[Related: AFG launches updated commercial lending platform]