AFG loan book increases 5%

The combined loan book was reported at $209 billion in 1H24 compared to $199 billion in 1H23.

AFG’s overall residential loan book was $197 billion at the end of 1H24, an increase of 4 per cent from 1H23, which recorded $188 billion.

Commercial loans for the group increased to $12.8 billion in 1H24, a 15 per cent rise from $11.1 billion in 1H23.

AFG Home Loans (AFG’s white label arm), however, reported a decrease of 2 per cent – to $8.5 billion on the previous six-month period – finishing 2023 with a book of $8.9 billion.

AFG Securities, the wholesale lending arm of AFG, saw its loan book drop 17 per cent to $4.1 billion in 1H24, down from $4.9 billion since 1H23.

The group said, however, that AFG Securities had no losses in 1H24 and that its settlements increased by 34 per cent in the final quarter of the calendar year (2Q24) when compared to 2Q23.

The report attributed the growth in AFG Securities flows to the removal of “sub-economic cashbacks” from major banks.

AFG’s chief executive officer, David Bailey, said: “The fight for market share by the major lenders saw our residential manufacturing business, particularly for the first four months of the year, become less competitive, which led to a higher level of run-off as customers sought cashback offers and lower interest rates.”

Lodgements for 2024 starting off strong

The CEO noted that home loan lodgements have continued to be “very positive” for the calendar year 2024 so far, reflecting on January and February activity.

Bailey commented on AFG’s outlook, stating: “In the second half, all eyes will be on the Reserve Bank’s interest rate decisions; however, the strength of the channel in helping to guide their customers through an increasingly complex market means home buyers will continue to turn to brokers for help …

“Although cost-of-living pressures continue to be felt by many Australian households, our brokers are reporting an increased level of inquiry, which points to a better residential market as we head into the second half of FY24 and into FY25.

“We look forward to continuing to provide support to our brokers and customers and to delivering shareholder value through the depth of our industry experience and strong balance sheet.”

The group stated that it will be focused on expanding its broker network and providing leading technology for the broking industry amid growing “compliance and cyber security requirements”.

The group recruited 87 new broker groups in 1H24, as it now has more than 3,850 brokers operating under it.

Bailey commented on the importance of mortgage brokers, stating: “Mortgage brokers are a part of the fabric of the communities in which they operate.

“Brokers provide a unique combination of choice and expertise, combined with a regulated duty to deliver outcomes in their customers’ best interests.”

The results come as the aggregator launched its in-house referral program, which allows brokers access to expertise from other broker partners.

[Related: AFG launches in-house referral program]