Bouris delivers $40bn book following restructure

ASX-listed diversified mortgage and wealth group Yellow Brick Road has posted strong settlement growth for the last three months of 2016, growing its loan book to $40 billion.

In a trading update for the three months ending 31 December 2016, Yellow Brick Road (YBR) reported $4.0 billion in settlements, achieving total loan book growth of 20 per cent to $40.8 billion.

YBR executive chairman Mark Bouris has been bullish about the company’s growth plans in the face of recent losses.

“We are pursuing a $100 billion loan book under management which equates to an approximate market share of 5 per cent,” Mr Bouris said following the release of the company’s full-year results in September last year.

In this week’s trading update, the group explained that its Yellow Brick Road retail business, which reportedly delivers a higher margin than its other distribution channels – delivered settlement growth of 20 per cent on the prior corresponding period.

However, Vow Financial aggregation settlements were down on the prior corresponding period due to “the impact of regulatory pressures on lending practices”.

The company said this made little impression on its bottom line.

“To compensate, brokers are pulling more opportunities into the Vow business, with applications up 23 per cent,” it said.

Late last year, YBR announced a number of senior leadership changes following the departure of wealth CEO Matt Lawler and lending CEO Tim Brown. The two CEO roles have been removed and new general managers have been appointed to lead the YBR lending, wealth and Vow business units.

Former Aussie Home Loans state manager Andrew Rasby now heads up YBR’s lending and wealth business, tasked with growing the franchise, while St George’s former broking boss Clive Kirkpatrick leads Vow Financial as general manager of lending.

Mr Bouris has also stepped in and become more involved in the business over the last few months of 2016.

Speaking at the FBAA conference on the Gold Coast in December, Mr Bouris explained that his recent decision to restructure the company made him “climb down into the business and remember that there are a lot of people there”.

“The only way we can be successful is that [the employees] understand that I need them to help me. Because I can’t do it without them. And the only way I’m going to get that message to them is actually being close to them. And they only way they are going to get that message is to be close to me,” he said.

“It’s an important lesson when it comes to running a successful business in any industry. In order to be successful, you have to understand what they’re doing, know what they’re doing. You have to be prepared to talk to them and you just have to put in more practical time.

“That’s been a massive, massive reminder for me over the past four-five months. Prior to that, I ran the business where I had a lot of people reporting to me, but just telling me what they were doing. I didn’t see what was going on below them because I didn’t really have access for that.”

Acknowledging that the responsibility for the lack of oversight was two-fold, Mr Bouris added, “Now, I could say that I was being kept away from that but, equally, I should have been in there anyway. To some extent, while I respect the integrity of the people who are at the executive level not to interfere [with] what they were doing, in the end when you’re trying to build a business and build your footprint and build your brand around that footprint and build your deliverables, I don’t think there is the ability to have that luxury.

“You have to be prepared to step in and honour the concept of most success being built on the broad shoulders of others. You have to recognise them and work with them, then you can relate to them and they can relate to you, and that’s a long process.”

[Related: Mortgage group names new GM]

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