AFG champions broker market share at FY22 AGM

AFG’s chair, Tony Gill, highlighted that across the past 12 months, mortgage brokers had continued to dominate the residential mortgage market and that “they are now responsible for almost 70 per cent of home lending flows.”

The popularity of the channel has benefitted the growth of the company, too.

Key AFG highlights for FY22 included:

- “Record” residential settlements of $59.4 billion, up 36 per cent on FY21

- AFG Securities book growth of 41 per cent to $4.8 billion

- Twenty per cent growth in normalised NPATA to $61.3million

Additionally, earnings associated with AFG’s Thinktank investment continued to “grow strongly” and were up 16 per cent to $6.1 million during the year, with the company’s Fintelligence and BrokerEngine acquisitions also performing “above our initial expectations,” Mr Gill explained. 

He commented: "I am pleased to report that AFG delivered another excellent operating performance during the 2022 financial year with overall volumes and key strategic investments delivering growth in underlying earnings and dividends."

"This was achieved on the back of strong demand for our mortgage broking and lending services during the 2022 financial year, and the Company’s ongoing diversification strategy across business lines and classes.

"This strategy has focused on building broker market share across a number of asset classes, and growing margins through expansion into white label, direct and investment lending.

"Importantly, the level of activity in the business has remained resilient as the RBA commenced much anticipated interest rate increases," My Gill stated.

RMBS program support locally and globally

Mr Gill said that the "extraordinary growth" of the past two years will of course be impacted by the changing macroeconomic environment globally.

As governments across the world move to curb rapidly rising inflation, borrowers must now face increasing interest rates and additional price pressures on their household budgets, he outlined.

"This changing environment poses both challenges and opportunities for AFG." he stated.

Though market sentiment has turned negative on the housing, discretionary spending and lending sectors, Mr Gill reminded that it is important to note the residential mortgage market has historically performed strongly during periods of rising interest rates and, "our strategy has us well positioned to weather this stage of the cycle."

"We have been very pleased with the support both onshore and internationally, for our RMBS program," he added.

"AFG issued $1.7 billion of paper to the market in FY22 and an additional $1 billion recently in September. An outstanding result that is testament to the fact that AFG Securities offers an exceptional lending alternative with industry-leading credit quality.

"It is recognised as providing a sound investment opportunity to the securitisation market," he concluded.

[Related: Brokers encouraged to donate to AFG charity fund]