A non-bank has stated that its efforts to strengthen its presence in the third-party space have helped bolster its loan book by 19 per cent.
Resimac has released its full-year results for the 2019 financial year, reporting 19 per cent growth in its principally funded loan book, up from $8.6 billion to $10.2 billion.
When including the uptake of its white label offerings (non-principally funded loans), Resimac’s loan book grew 11 per cent from $12.1 billion to $13.4 billion.
Above-system growth in Resimac’s loan book was slightly offset by a 1 per cent decline in its settlements, which fell 7 per cent from $4.3 billion in FY18 to $4.1 billion.
Speaking to The Adviser following the release of Resimac’s FY19 results, CEO Scott McWilliam and CFO Jason Azzopardi attributed its above-system lending performance to its efforts to expand its presence in the broker space.
“It’s a combination of simplifying our brand in the broker market under the Resimac brand, the investment in education to that particular origination source, and a broad set of products that we offer down that channel,” Mr McWilliam said.
“[This was] further supported by strong consumer desire to be looking at and considering alternate brands in the market and moving away from the more established household brands in the past.”
Mr Azzopardi added that Resimac’s service offering has also been well received by the third-party channel.
“I think the key focus has also been our service proposition to brokers,” he said.
“One of our key strategic priorities is maintaining very high and efficient service levels for our brokers.
“[We] aim to maintain [turnaround times] within 24 hours, and I think that’s resulted in the broker channel really supporting [us].”
Mr McWilliam said that the lender plans to make further inroads in the broker channel by promoting the non-bank’s brand and suite of offerings while also investing further in its service proposition.
“It’s a combination of further education [of brokers] about the Resimac service proposition, but also our products,” he said.
“It also involves investing in technology to improve that onboarding experience for brokers, which is a company-wide initiative where we’re looking to invest heavily into the business to improve the broker experience, but also the customer experience post-settlement.”
The non-bank’s portfolio growth spurred a 19 per cent increase in its net profit after tax, which grew from $26.2 million to $31.1 million.
Resimac’s underlying performance was also bolstered by a 5.1 per cent reduction in its cost-to-income ratio (56.6 per cent) and a marginal improvement in its return on equity (17.3 per cent).
Non-bank market share to remain strong
When asked if he expects an improvement in the credit appetite of the ADI sector to stunt growth in demand for non-banks, Mr McWilliam said he is confident the sector would maintain market share by continuing to offer specialist solutions for borrowers that have been traditionally turned away by ADIs.
“I think it’s more of an awareness piece. The banks’ appetite to write business has fluctuated over the year, but the reality is their appetite to write business where we are currently writing business has not changed,” he said.
The Resimac CEO also noted the growing contribution of the broker network in facilitating credit alternatives for borrowers.
“I think there’s also a greater desire for brokers supporting lenders in the market that have a strong service proposition, that have a broker-centric proposition but are also offering products at competitive rates,” he said.
“I don't see the market share changing depending on when banks are wanting to play or not play.”