Liberty achieves record loan originations in FY26

However, flows slowed in the second-half (2H26) across key segments, as an elevated interest rate cycle, cost-of-living pressures, and federal budget changes impacted consumer demand.

Despite the second-half deceleration, the group’s overall loan book has expanded to $15.24 billion, with higher-yielding secured and financial services assets now comprising 50 per cent of the total portfolio (up from 48 per cent in 1H26).

Residential lending at near-record high

More than half of the group’s new lending came from its residential lending division, with Liberty also seeing strong growth in its secured lending division and financial services division.

According to the group’s financial results, residential loan originations reached $3.53 billion for FY26, the second-highest volume ever recorded for the non-bank lender (behind FY22, when Liberty originated $3.9 billion in new home loans).

Its FY26 figures were led by a strong $1.85 billion in 1H26 before moderating to $1.68 billion in 2H26. Overall, Liberty’s residential loan book closed FY26 at $7.66 billion, marginally down on the $7.75 billion at the end of FY25.

Liberty has attributed the reduced second-half volume to “subdued consumer demand impacted by increased rate cycle, cost of living and budget changes”, but added that – unlike the major banks – there had been no material shift in application flow or owner-occupier versus investor mix since the budget.

Speaking to The Adviser, Liberty CEO James Boyle said: “I think most banks have now announced at least a double-digit percentage drop in their demand, so I think that’s for the most part… but we certainly have been happy to be able to help continue to help customers at the same rate since budget, as before.”

Boyle said he believed Liberty had been shielded from the issues seen by the banks due to its “well-differentiated offering” and ability to set its own risk appetite.

“We’re not a deposit taker, and we get to set our own risk appetite, which means we’re able to help customers outside the parameters that APRA set. And it just seems that in recent times – the last year or two – that given the more challenging economic environment and the really strong conservative position of APRA, there are more customers needing our kind of help, and the help of non-banks,” Boyle told The Adviser.

“I think that talks to the consistent demand that we see in our residential lending business.”

The Liberty CEO said that he believed the non-bank had seen continued demand from borrowers post-budget as Liberty’s lending was “more flexible and better able to help customers in circumstances where the mainstream can’t”, he said.

“So, I think the addressable market for non-banks is improving in the current environment, and that’s why we’ve maintained our momentum, rather than having slowed,” Boyle said.

However, Liberty’s residential self-managed super fund (SMSF) applications did fall in the second half (from $251 million in 1H26 to $230 million in 2H26) as borrowers prepared for the ban on new limited recourse borrowing arrangements for residential property inside self‑managed super funds.

Boyle said he expected the ban would further reduce residential SMSF originations in upcoming periods and also warned that should this rising rate cycle continue alongside falling asset prices and rising unemployment, then all lenders would likely be impacted by softening flows in FY27.

Liberty has cautioned that elevated interest rates may impact delinquency rates, which had grown between the two halves. The 30-day delinquency rate reached 3.97 per cent at the end of 2H26, while the 90-plus day delinquency rate grew to 2.20 per cent. However, both figures have reduced when compared to 2H25 levels.

New technology expected

To maintain operational efficiency, the non-bank has outlined plans to continue investing in automation and enhanced digital experiences, noting that the current market environment supports continued brand differentiation.

It said it would leverage Liberty’s proprietary technology to reduce uncertainty and provide fast answers while maintaining quality, build advocacy by providing stakeholders with “timely and helpful answers to their queries”, and encourage self-service by providing customers and business partners with access to their information online, anytime.

Liberty added it would also look to drive customer choice by increasing ways that customers and business partners are able to choose Liberty for their financial needs, including by making options available for “customers who are otherwise excluded from financial choices”.

Boyle told The Adviser: “I hope our business partners and brokers do start to see better responsiveness from us across all parts of our business. Speed of answer, in particular, is an area that we’re deploying these tools to help us with the speed at which we can pick up complex applications (and consume all the complexity and the verification documents that come with it), and then come back to the broker with a confident answer.

“I think this will only continue to get better as these tools become more muscle memory in our organisation.”

While the lender said it was still “in the early stages of agent engagement and AI software development”, Boyle said that these were starting to show “early promise” and starting to make a “bigger difference in engagement”.

“I can’t point to any single thing that brokers can expect to see from us over the coming 3, 6 or 12 months, but what brokers can expect from us is consistent improvement that makes us faster, better, and a stronger business partner as a choice for them,” Boyle said.

This includes working “proactively” with customers if “things don’t go to plan”, particularly with customers in hardship.

For brokers, it would also look to simplify applications by making the application process quicker and easier, involving less effort.

It would also look to drive customer choice by increasing ways that customers and business partners are able to choose Liberty for their financial needs, including by making options available for “customers who are otherwise excluded from financial choices”.

Boyle said: “Recently announced budget measures along with continued geopolitical and interest rate uncertainty has impacted consumer confidence.

“Nevertheless, having a diverse range of customer solutions places us in a position to be able to continue to deliver for customers and securityholders in FY27.”

Overall, Liberty reported an 8 per cent increase in statutory net profit after tax (NPAT) to $144 million.

Underlying NPATA rose 7 per cent to $156 million, supported by net interest margin expansion to 2.50 per cent, portfolio growth, and cost discipline.

The company has declared a fully franked dividend of 15¢ per stapled security, to be paid on 21 September 2026.

[Related: First non-bank joins 5% Deposit Scheme]