Australian Finance Group has reported a substantial lift in settlements across the board for FY26 yet warned that lodgements had slowed since the federal budget.
Major aggregator Australian Finance Group (AFG) has reported an 18 per cent lift in residential settlements to $75 billion for FY26, while warning that lodgements had slowed since the federal budget as investor activity drops.
The ASX-listed aggregator and non-bank lender said residential lodgements in August were 16 per cent below the equivalent period a year earlier, following a slowdown that began in mid-May.
AFG identified New South Wales, Queensland and South Australia as the states recording the largest changes.
The softer near-term read-out comes despite a year of growth across AFG’s aggregation, lending and services businesses, with net profit after tax rising 39 per cent to $49 million and underlying NPATA increasing 33 per cent to $54 million.
Distribution EBITDA rose to $71 million, while the group’s broker network expanded to more than 4,300 brokers.
AFG said the network now wrote one in nine Australian mortgages, with chief executive David Bailey noting that the group’s network growth continued to outpace the broader market.
“Scale is our strength. It enables us to invest more in technology, compliance and broker support, attracting high-quality broker groups,” Bailey said.
“With 32 years of proprietary insights and industry experience, we are well placed to develop and distribute a wider range of products through the network. These advantages reinforce each other and are increasingly evident in our results.”
Settlement growth meets softer pipeline
AFG’s full-year residential settlement result was supported by higher broker productivity, with gross profit per broker rising 12 per cent to $43,000.
However, its forward-looking lodgement data points to a more subdued opening to FY27.
“Volumes have slowed in the last two months, driven predominately by investor activity,” AFG said.
AFG said investor flow was sitting at 34 per cent, marginally below its long-term average and added that refinancing and upgrader activity remained low.
Bailey said the recent caution reflected a number of overlapping pressures.
“Residential lodgements have softened since June as borrowers respond to changing tax policy settings, interest rate expectations, and household cost pressures,” Bailey said.
“While this has led to more considered decision-making, underlying housing demand remains intact. A medium-term structural challenge in housing supply remains, and customers continue to need trusted support to navigate an increasingly complex lending environment.”
AFG reported that 30-plus-day arrears, including accounts in hardship, had risen to 1.7 per cent, up from 1.6 per cent at June 2025.
Manufacturing book swells
AFG’s lending or manufacturing business was among the strongest contributors to the FY26 result, with its loan book rising 30 per cent to a record $7.1 billion, from $5.5 billion a year earlier.
The group said manufacturing settlements achieved a peak market share of 5.3 per cent, while the non-bank share of settlements reached 13 per cent. The aggregator said that its white-label book stood at $7.3 billion.
AFG has set an aspiration to expand its manufacturing loan book to $9 billion by FY29.
The group said 78 per cent of earnings were now diversified across manufacturing and other distribution income, overtaking earnings linked to residential lending.
Bailey said AFG entered FY27 with a larger lending book and just 10 per cent of earnings directly exposed to short-term residential volumes.
“This year’s results reflect a business that is no longer defined by the near-term housing cycle alone and has more ways to grow,” Bailey said.
“We have expanded our broker network, grown our lending business, increased recurring income through Broker Services and continued to build our Broker Investments program. Together with ongoing investment in technology that supports broker productivity, these initiatives create more opportunities for AFG.”
That diversification was also reflected in growth across other product lines.
Commercial mortgage volumes rose 24 per cent to $6.3 billion, asset-finance settlements increased 19 per cent to $4.3 billion, and AFG said that its car and equipment finance settlements had grown at a 19 per cent annual rate since FY22.
Personal-loan volumes were $74 million, while 59 per cent of AFG brokers were writing multiple products.
Recurring income expands
Broker services income increased 13 per cent to $24 million, extending what AFG described as more than eight consecutive years of growth.
Its trail book grew to $232 billion at FY26, from $211 billion a year earlier.
Bailey said AFG expected refinancing, upgrader activity and customer retention to remain relevant opportunities as borrowers compared existing loans and considered their next move.
“In this environment, the broker channel remains structurally well placed,” he said.
“Borrowers are increasingly relying on brokers to compare lenders, interpret policy changes and make informed decisions. AFG’s scale, broker relationships, technology and funding capability work together to strengthen the business and support both our earnings growth and our reputation as a market leader.”
Bailey said the business’s earnings mix and capital-light distribution platform differentiated it from major bank competitors.
“While market conditions remain choppy, AFG’s business model is distinct from traditional banks, with a diversified earnings base, capital-light distribution platform, growing lending business and strong broker relationships providing resilience through the cycle," he explained.
“While market conditions remain choppy, AFG’s business model is distinct from traditional banks, with a diversified earnings base, capital-light distribution platform, growing lending business and strong broker relationships providing resilience through the cycle."
[Related: AFG index reveals east coast slowdown]
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