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Non-bank records surge in branded home loans

by James Mitchell4 minute read

An Australian non-bank lender has seen a significant increase in branded loan settlements over the 12 months to 30 June.

In a trading update this week, Homeloans announced a statutory net profit after tax (NPAT) of $5.6 million for the year ended 30 June 2015. Normalised NPAT after adjusting for internal restructuring costs and other non-cash items was $5.9 million.

Homeloans chief executive Scott McWilliam highlighted the group’s strong lending growth during the 2015 financial year, particularly within its core business of Homeloans branded loans, where settlements increased 23.7 per cent for the year to $1 billion.

“In total, with the inclusion of non-branded loan originations, new business volumes increased by 14.9 per cent,” Mr McWilliam said.

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“The growth in branded loan settlements was a direct result of the company’s investment in sales distribution, brand development and funder partnerships, combined with favourable market conditions.”

In February Homeloans acquired Queensland-based Barnes Mortgage Management. The acquisition added $0.5 million in funds under management and access to a broader group of brokers through the Barnes brand, Mr McWilliam said, adding that a key area of focus during the year was to strengthen relationships with the third-party market.

“This involved optimising relationships with our top supporting and high potential brokers,” he said.

“As well as investing efforts into nurturing these partnerships, we made a commitment to enhance productivity by increasing front line staffing levels and reviewing our on-boarding processes. We also introduced more targeted marketing activities to brokers via traditional and digital means, including social media.”

As a result of these initiatives, total branded settlement volumes through the third-party channel increased by 27.8 per cent over the 12 months to 30 June.

Settlements from the group’s top 100 brokers were 34.9 per cent higher than in the previous period.

Commenting on recent industry changes that have seen lenders moving to differentiate on policy and pricing, Mr McWilliam said Homeloans is expected to benefit with its diversified funding base.

“The company’s wide range of balance sheet and non-balance sheet funder relationships, broad distribution capabilities and national footprint provide Homeloans with flexibility and certainty at a time of broader industry transition,” he said.

“In addition, Homeloans continues to assess further opportunities, both organic and inorganic, that are aligned with the company’s strategic direction and complementary with existing operations.”

[Related: Homeloans cuts rates by 30 basis points]

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James Mitchell

James Mitchell

AUTHOR

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

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