Yellow Brick Road founder Mark Bouris believes that regulatory restrictions could be a blessing in disguise for his business.
In the group’s annual report, released this week, the YBR executive chairman acknowledged the negative impact that APRA changes have had on market conditions, but said that he hopes to fill the void left by major lenders.
“Lending restrictions by the regulators affected volumes across the sector and credit conditions have continued to tighten. However, this presents opportunities as well,” Mr Bouris said.
“Major lenders have repriced risk and redefined their definition of prime borrowing candidates; meaning, there is a growing pool of potential borrowers who can be serviced by alternative lenders.
“Yellow Brick Road is actively considering opportunities to meet this demand with appropriately risk-priced products.”
The ASX-listed company recently appointed former Macquarie Bank director Frank Ganis to its board, and Mr Bouris was quick to praise Mr Ganis’ experience with securitisation and wholesale funding.
“We are always exploring different funding lines,” Mr Bouris said. “Frank was one of the original architects of PUMA, so those are some of the things we’ll be calling on him to have a look at.”
YBR is also eager to capitalise on opportunities in the commercial lending sector. Mr Bouris noted that the increased availability of business credit, spurred by strong competition among alternative lenders, is driving growth for the group’s aggregation business, Vow Financial.
Yellow Brick Road grew its underlying loan book to $44.1 billion in FY17, up by 17 per cent from the previous year, and completed settlements at a combined worth of $15.3 billion.
Mr Bouris attributed some of the company’s recent success to its adoption of new technologies, which he believes have increased service efficiency.
“Technology and innovation continue to play a vital role in our business. Our lead management tool has improved response times, conversions to meeting and marketing productivity.”