AFG chief executive David Bailey is encouraging brokers to provide submissions to the Productivity Commission, adding that scrutiny of the industry is evidence of its strengths.
Speaking to The Adviser following the release of the aggregator’s half-yearly results, Mr Bailey said that AFG will be making a submission to the Productivity Commission, which released a scathing report on the third-party channel earlier this month.
“We will make our submission to the Productivity Commission and [are] encouraging our brokers to make submissions,” the CEO said.
“Part of that process is to validate some of the comments that were made in the draft report and to clarify and define where AFG sees the market as opposed to market.”
Asked whether the level of broker scrutiny was unreasonable, Mr Bailey said that he takes a pragmatic view and sees it as “almost a backhand compliment”.
The CEO said: “Brokers are now nearly 56 per cent of mortgage originations in the country, so it is only reasonable that regulators will be looking into the sector, given that it is now taking the lion’s share of originations in the country. It is something we can expect moving forward.”
Vertical integration has been a hot topic for regulators and a constant feature in the plethora of reports into the mortgage broking industry.
Mr Bailey said that AFG has been very vocal about its view on bank ownership of brokerages, which has not changed.
“We are independent and there is a reason we are independent. We think it serves the interest of the consumer,” Mr Bailey said.
AFG-branded mortgage book up by 40 per cent
AFG reported an underlying NPAT of $14.4 million for the first half of FY18, up by 11 per cent on the same period last financial year.
AFG Home Loans (AFGHL) continued to deliver positive financial growth and settlements grew by 31 per cent to $1.62 billion. The AFGHL loan book has reached $6.5 billion, an increase of 40 per cent on the same period last year.
“We have identified different white label funders that can provide different types of products across a broader section of the Australian community. We now have a broad offering, which is accessible for all brokers irrespective of the customer they’ve got,” Mr Bailey said.
“One of the things we have been very keen on doing is ensuring the loans have a very good rate. But we have also ensured that the experience the brokers receive around credit decisioning and turnaround times is in the top quartile across our panel.”
AFG’s combined residential and commercial book grew by 11 per cent over the first half of FY2018 to $140.8 billion.
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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