COG originations rose 20% in 1H24

The group – which includes COG Aggregation, Platform Finance, Mildura Finance, Platform Direct Finance, beCarWise, Fleet Network, Paywise, and COG CarSelect – revealed that its overall volume of net assets financed, increased by 27 per cent from $3.4 billion in 1H23 to $4.3 billion in 1H24.

Assets under management across the group totalled $854.8 million in 1H24, an increase of 27 per cent from $700.7 million in 1H23.

According to the group, new loan originations rose by 20 per cent in 1H24, to $71.2 million (including $55.8 million in chattel mortgages), up from $59.2 million (and $37.2 million in chattel mortgages) in 1H23.

The financial report revealed that around 7 per cent of the growth was organic, with COG’s recent acquisition of NFC Aggregation and UFS Aggregation in August 2023 making up the remaining 13 per cent growth in aggregation volume.

Speaking on the group’s increase in aggregation volumes, Ryan Young, chief executive at COG Aggregation, said: “This was underpinned by modest market growth and strong new member acquisition, with brokers seeking to partner with a specialist and looking for the certainty of a well-established player.”

In addition, Platform Finance, COG’s strategic partnerships business, recorded a 7.7 per cent increase in settlements.

COG reported that its network now included 1,576 brokers across a total of 741 businesses around the country.

The largest amount of broker businesses was recorded in Victoria at 285 (a total of 469 brokers), followed by NSW and the ACT racking up a combined total of 238 broker firms (505 brokers).

According to the company, COG accounts for 21 per cent of the industry’s net assets financed in commercial equipment finance settled by brokers.

COG commented that its “broker network played an integral role in the solid performance” seen in 1H24.

Mr Young stated: “Along with our broker partners, we’ve seen some pressure on margins, driven by interest rate rises. The commercial segment continues to perform well, while activity in consumer transactions has been more erratic month to month.

“We’re also seeing a flight to scale, driven either by superior economics or increased certainty. This is the case with both lenders, with the banks clawing back some market share from finance companies and with aggregators, as brokers seek certainty and the marginal benefits of scale.

“In a high-rate environment, every dollar and every percentage point is crucial.”

Mr Young commented on COG Broking and Aggregation’s outlook, stating: “We anticipate the second half will remain solid and hope to see some support from a gradual reduction in interest rates.

“The overall picture for our market segment is one of continued solid progress, but where participants are having to work harder and smarter to make it happen.”

[Related: Novated leasing drives COG profits]