Powered by MOMENTUM MEDIA
the adviser logo
Lender

‘Overwhelming shift’ in consumers wanting alternatives: Homeloans

by Lucy Dean5 minute read
Dollar

Both consumers and brokers are increasingly looking to alternative lenders for finance as price differentiation and market “noise” pushes customers to look wider, Homeloans says.

Homeloans today (28 August) announced a normalised net profit after tax (NPAT) of $18.7 million before accounting for merger transaction and restructure costs for the 2017 financial year. Homeloans acquired RESIMAC in October last year.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

Speaking on the result, joint CEO Scott McWilliam said: “We're still a very small part of the market when you compare what we're writing compared to some of the big banks, the majors and also the regionals. So, our ability to grow is obviously a lot easier than it is when you're a big bank.

“The non-bank sector still remains a small part of the overall sector, but obviously there is strong momentum at the moment because customers and brokers are obviously seeing value in the alternatives in the market today.”

Advertisement
Advertisement

Price differentiation is forcing customers to consider a wider array of lenders in place of the same institutions they may have been dealing with in the past, Mr McWilliam said.

“There’s a lot of movement and noise in the market, whether it be turnaround times, pricing and ... interest rate movements over the last 12 months. With that type of noise, customers and brokers want to know what else is available.”

Operating in the non-bank sector has meant Homeloans is “absolutely customer and broker-centric”, Mr McWilliam said, adding that the group is service-orientated which also appeals to consumers.

Homeloans reported an increase in total settlements of 20.0 per cent year-on-year ($3.6 billion). Additionally, principally funded loans and advances were up by 22.2 per cent at $6.6 billion. The lender’s third-party broker book was $4.0 billion.

Mr McWilliam said: “We're obviously extremely pleased with the result. It is a result that speaks well to the merger which is almost a year old now ... and it obviously supports the merits of it and [the fact that] there is strong momentum in the market supporting our book growth, and the third-party space is supporting the combined organisation as well. There's a lot to be happy about.

“We're still only a small part of the sector and there's a lot of room to grow.”

Looking to the future, Homeloans is expecting settlement volumes to remain strong in FY18, arguing that as a non-bank lender, Homeloans is well positioned for growth.

“Settlement growth will continue to be supported by the third-party broker market, with Homeloans having access to up to 85 per cent of brokers, which will be supplemented by loan growth from our direct channels,” the lender said in a statement.

“Assuming current economic conditions prevail for the remainder of the financial year, the FY2018 financial year result is expected to be stronger than the FY17 result.”

[Related: Lender will increase broker commissions]

‘Overwhelming shift’ in consumers wanting alternatives: Homeloans
dollar hand
TheAdviser logo
dollar hand

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

Boomer home loans

New non-bank lender enters administration

Specialist lender Boomer Home Loans, named in reference to its target age demographic (Baby Boomers; those born in...

READ MORE
royden dvaz assetline capital ta fh2e1i

New national head of sales recruited at Assetline Capital

Royden D'Vaz, formerly head of distribution with the non-bank mortgage lender MKM, has been recruited as Assetline...

READ MORE
john maxwell oscar zhuo ta sthnmq

Uptick Marketing launches

Uptick Marketing (Uptick) aims to work in partnership with brokers to assist the third-party channel in “closing...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more