ISCOVER
The non-bank lending group saw originations fall and discharges increase in FY25, which the lender has attributed to strong competition in market.
ASX-listed financial services company Liberty Financial Group has released its financial results for the full year ending June 2025 (FY25), revealing that while its overall portfolio was flat over the year, it saw weaker loan originations.
According to the results, released on Monday (25 August), competitive pressures and higher customer refinancing weighed on growth.
The non-bank lender wrote $5.1 billion in loans over FY25, down from $5.7 billion in the prior year, although its overall portfolio edged up slightly to $14.7 billion from $14.6 billion.
Residential lending fell
Liberty’s residential loan book fell 2 per cent, to $7.75 billion from $7.98 billion, as discharges and amortisation rose to 38 per cent, exceeding new originations.
Residential loan flows were steady year on year at $3.05 billion (up from $3.04 billion in FY24), but skewed towards the first half of the year ($1.70 billion in 1H25, compared to $1.35 billion in 2H25).
Speaking to The Adviser, Liberty’s chief executive officer, James Boyle, attributed the residential portfolio softness to heightened customer refinancing and market competition, alongside a “disciplined approach to growth” as the lender “balanced efforts between front book and retention”.
“Discharges have been heightened as a function of rampant competition and the great work that brokers do to help customers who are feeling the impacts of higher interest rates in searching for and finding home loans that better suit them in this environment,” Boyle told The Adviser.
However, Boyle noted that home loan applications were 33 per cent higher in the final quarter of the year as a result of the falling interest rate environment, adding that he expected originations to be higher in the first half of this financial year.
“We're expecting fully to turn [origination growth] around now in the current period, because what we're seeing is lots of opportunities for non-banks, in particular, to help customers in an interest rate reducing environment where more customers are looking to get out there and participate in home ownership. And frankly, we think the non-banks are in a better place to help them.”
Boyle also noted Liberty’s focus on retention. Speaking to The Adviser, he said: “We proactively engage with our customers and reactively as well, to try and help them not have to go out in the market and test and move so frequently.
“Brokers do great work in staying close to their customers, and we really try to work hard in partnership with them to help customers find the best possible outcome, and preferably with us, all other things being equal.”
Commercial and motor finance book grew
While mortgages softened, Liberty’s secured business, including commercial mortgages and motor finance, expanded to $5.91 billion (from $5.7 billion). Originations in this division slipped to $1.63 billion, down from $2.1 billion in FY24, reflecting “cost discipline” and competitive motor finance markets.
As was the case with residential mortgages, secured originations were lower in 2H25 ($753 million vs $985 million in 2H24), as a result of “cost discipline” and “continued competitive pressures in motor finance”.
However, applications strengthened late in the year, rising 14 per cent in 4Q25, which the lender expects will translate to higher flows in FY26.
Personal lending originations declined
The financial services arm, which covers personal lending, also saw its portfolio rise, from $866 million to $916 million. However, originations fell to $420 million from FY24’s record $535 million. Similar to other parts of the group, personal loan flows dropped in 2H25, falling to $182 million (down from the $241 million in 1H25 and $261 million recorded a year earlier).
Boyle said the decline reflected “a challenging consumer environment” and renewed competition from banks re-entering the personal lending market.
He added that he expected personal lending to improve amid this reducing interest rate cycle.
While Liberty Group does not report the flow of loans written by its aggregation groups Liberty Network Services (LNS) and nMB, CFO Peter Riedel told The Adviser that volumes were higher in FY25 than FY24 for both brands, with two aggregators seeing “good growth throughout FY25”.
New projects in the pipeline
Looking forward, the Liberty Financial CEO told The Adviser that the lender will continue to have a diversified strategy across asset classes.
“We’re long established in small business lending, self-managed super fund lending, personal lending, motor finance, home loans, insurances. We offer all of those products through broking channels, so we will be continuing that same strategy of discipline and diversification.”
He flagged that the lender had two ongoing projects in residential and SME commercial lending aimed at boosting FY26 origination growth.
“We have two distinct projects in the pipeline pretty well progressed, at the business-case testing phase, in both the residential lending and SME commercial lending space.
“We intend on making some announcements at the end of this year or very early next calendar year,” Boyle said.
Boyle added that while lending growth had been slower in FY25, Liberty Financial posted a 10 per cent rise in underlying net profit after tax and amortisation, to $145 million in FY25, supported by disciplined pricing and stable portfolio performance.
Net revenue increased to $604 million, while the net interest margin eased slightly to 2.49 per cent, which the lender said reflected a balanced approach to growth in a competitive market.
Boyle said this showed Liberty had “got the balance right between helping customers at fair prices and sticking to long-term, rational pricing practices.”
[Related: Liberty Financial Group reports diverging originations]
JOIN THE DISCUSSION