The non-bank lending group has achieved a new half-year record for loan originations, even as its book faces high discharge rates amid “fierce” bank competition.
ASX-listed financial services company Liberty Financial Group (Liberty) has released its interim results for the half-year ending December 2025 (1H26), revealing that while total group originations climbed to $3.1 billion, the overall loan book remained stable at $14.8 billion due to elevated refinancing activity.
According to the results, released on Monday (23 February), the lender saw a significant uptick in new business across its residential and secured business segments, offset by a "rear guard" battle to retain existing customers in a market where banks are aggressively chasing market share.
Residential originations hit $1.85bn
Liberty’s residential originations increased to $1.85 billion in 1H26, up from $1.7 billion in the prior corresponding period (1H25). However, the overall residential portfolio continued to shrink, falling to $7.63 billion as the annualised discharge rate rose to 40 per cent.
Speaking to The Adviser, Liberty’s CEO, James Boyle, attributed the portfolio softness to the speed at which customers are being lured away by competitors.
“The banks are competing fiercely. They’re definitely lowering standards in order to try and drive better market share,” Boyle told investors.
“What that means is there are pretty good alternatives for customers to go to banks pretty quickly after they’ve joined us. That’s the rear guard that we continue to try to manage as best we can.”
Boyle noted that while Liberty is proactively engaging with brokers to provide longer-term solutions, the diligent work of brokers often leads to customers switching lenders.
The CEO noted that aggregation group Australian Finance Group (AFG) recently revealed that it had seen record broker lodgements, suggesting that “brokers have just been more and more effective at engaging more customers more often, which, of course, feeds the discharge phenomenon”.
“Brokers do a really good job at staying in touch with their customers and watching after their financial best interest. Part of the reality is that this can often result in a conversation that leads a customer to change lender rather than stay,” he told The Adviser and added that there are no “silver bullets” for the industry-wide retention challenge.
Nevertheless, the Liberty CEO told The Adviser that “there’s definitely an opportunity for Liberty to further explore how it can be better at seizing that moment without brokers having to feel like they need to move a customer to another lender, and without creating work for the customer and the broker, as well”.
Secured business hits $1bn milestone
While the mortgage market remained a battlefield, Liberty’s secured business – driven by small- to medium-sized enterprise (SME) and self-managed super fund (SMSF) lending – reached a milestone $1 billion in originations for the half.
The secured business portfolio grew to $6.1 billion in December 2025, up from $5.8 billion a year earlier. Boyle highlighted that SMSF lending remains a core differentiator for the non-bank.
“We think we do SMSF as well as, if not better than anyone else. We haven’t reduced our appetite what banks have,” Boyle said. “Some of those super funds continue to be the one vehicle choice for wealth creation for small business owners. SMSF is a really natural extension for brokers moving from consumer into small business lending.”
Boyle encouraged brokers looking to diversify to lean on Liberty’s business development manager (BDM) team for support in navigating the SME and SMSF space.
Financial services benefit from rate environment
Liberty’s financial services arm – which includes its interest in Moula and MoneyPlace, as well as aggregators Liberty Network Services (LNS) and National Mortgage Broker (nMB) – reported $230 million in new lending.
While this was a slight dip from the $241 million recorded in 1H25, it represented a recovery from the $182 million seen in the immediately prior half (2H25). The group suggested this momentum was fuelled by an improving consumer environment following interest rate reductions earlier in the year.
The total financial services portfolio increased from $916 million to $1 billion over the half.
The lending group is targeting a pick-up in unsecured business lending and recently acquired a 50 per cent equity interest in unsecured business lender Moula and its subsidiaries. As reported by sister brand Broker Daily, Liberty Financial expects to roll out new packages to meet both secured and unsecured business lending later this year to build on this momentum.
“I hope, through time, it becomes a really significant part of our business,” Boyle told investors.
Diversified strategy continues
Despite “intense competition” in the auto lending space and the high churn in residential mortgages, Boyle said he remains optimistic about the group’s diversified model.
“While we were delighted with the momentum we achieved, setting new origination records... competitive tensions resulted in lower portfolio progress than we would have liked,” Boyle told investors and noted that forecast rate hikes will add to headwinds.
“We feel that we have once again managed the challenges of the environment and competitive pressures well.”
[Related: Liberty Financial loan flows slipped in FY25]
