subscribe to our newsletter

Non-bank reaping the rewards of less red tape

A non-bank lender has reported a profit increase of 10 per cent, driven by 15 per cent loan growth despite slowing credit and housing market conditions.

In its full-year 2018 (FY18) results, Liberty Financial has reported a net profit after tax (NPAT) of $64 million, up by 10 per cent from FY17.

The non-bank’s profit growth was spurred by a 15 per cent rise in new loan originations, increasing the value of its total assets under management 35 per cent to $10.2 billion.

Speaking to Mortgage Business, Liberty Financial CEO James Boyle said that the bank has benefitted from escaping prudential regulations.

“[We] are able to exercise a different appetite, so our credit is not constrained by prudential regulation in the same way that banks are,” Mr Boyle said.


“What we’ve seen over recent periods is that banks have an appetite that has been curtailed [by] prudential requirements that we’re not subject to.”

Mr Boyle also noted that Liberty offers loans to borrowers which banks no longer provide, making reference to decisions by some banks to withdraw from self-managed super fund (SMSF) lending.  

“[What’s] different about us is were able to help customers that banks no longer choose to,” Mr Boyle continued.

“An example of that is self-managed super fund lending. We have continued to provide users of SMSFs with credit, while weve seen in the last few months [that] all of the major banks and some of the smaller banks pull out. 

“Its our commitment to providing ongoing broad solutions that has allowed us to grow faster than weve seen in other parts of the market.”


Further, when asked about the Reserve Bank of Australia’s recent suggestion that the rise in non-bank market share could “increase stability risks”, Mr Boyle said: “We are all bound by the same responsible lending standards; banks and non-banks alike are required to conduct themselves in a way to demonstrate that they have understood the customers financial objectives and that theyre mindful of that in providing them with a contract.

“In terms of the systemic risk, although we have enjoyed growth over the last couple of years, and our cohorts have as well, in the bigger picture, were still a small part of the overall market — less than 10 per cent.

“I think its a very good thing that non-banks are able to provide alternatives to consumers who are not finding those solutions from banks at the moment.”

[Related: Non-bank rise could ‘increase stability risks’: RBA]

Non-bank reaping the rewards of less red tape
Arrow up

Grow your business exponentially in 2022!

Discover the right strategies to build a more structured, efficient and profitable businesses at The Adviser’s 2022 Business Accelerator Program.

Visit the website here to secure your ticket.

Charbel Kadib

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The percentage of young adults looking to pay down their home loans has risen over the past five months, according to new data. ...

Despite the Reserve Bank digging its heels in on the timing of its cash rate climb, Westpac economists have predicted the right conditions w...

Customer-owned banks operate around four branches per $1 billion in assets, while the big four collectively run less than one shopfront per ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

When do you expect the cash rate to start increasing?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.