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APRA curbs hit YBR mortgage volumes

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bouris
James Mitchell 2 minute read

Yellow Brick Road has reported a fall in mortgage settlements over the three months to 31 March but managed to grow its group loans under management in tough market conditions.

In a trading update, YBR revealed that overall settlements came in at $3.7 billion, 8 per cent lower than Q3 FY2016 and driven by tough lending market conditions compared to the prior corresponding period. Meanwhile, group loans under management grew 19 per cent to $42.5 billion.

“Recent initiatives by regulators seeking to limit the volume of certain types of lending, including investment loans and interest-only loans, have affected the lending market,” the company said.

“The company has seen lower than expected lending volumes as a result of the changes. To date the reduction has not been sufficient to materially affect the company’s ability to continue to meet market expectations (a FY2017 full year profit).”

YBR noted that it has been unable to quantify the medium-term impact of the changes on lending volumes.

The group flagged that the net value of its future lending trail income receivable (Loan Book Embedded Value), which is independently assessed in conjunction with the preparation of the company’s Audited Annual Financial Statements, may be affected by the recent changes in the lending market.

“Any re-valuation would have an impact, either positive or negative, on FY2017 profit. At this stage the company, does not anticipate any change in valuation inputs or methodology. If the company becomes aware of any material changes it will advise the market immediately,” it said.

One the YBR’s key operational priorities over the quarter has been recruitment, where it says new advertising has “doubled lead flow and quality”. As a result, 80 per cent of new recruits now have significant broking or financial planning experience.

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[Related: Tech provider joins forces with YBR]

APRA curbs hit YBR mortgage volumes
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James Mitchell

James Mitchell

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.

He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.

James holds a BA (Hons) in English Literature and an MA in Journalism.

 

 

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