National brokerage Mortgage Choice has announced a record profit after 12 months of strong demand for residential mortgages.
The group announced a net profit after tax of $18.7 million, an increase of 18.6 per cent on the previous financial year.
Broker usage increased from 44 per cent to 50 per cent in the 12 months to June 30, helping Mortgage Choice grow its loan book by 4.6 per cent to $47.4 billion.
The group also recorded a significant increase in settlements, up 18.1 per cent to $10.4 billion.
Chief executive Michael Russell said the annual results had far exceeded expectations.
“We have embraced the opportunities that the strong market has presented us with and managed to deliver some of our best financial results to date,” Mr Russell said.
“In addition, we continue to grow and evolve our diversified business and are now well on our way to becoming a very successful diversified financial services player,” he said.
At the release of its full year results yesterday, Mortgage Choice chief financial officer Susan Mitchell outlined a three-year strategy that will see the brokerage transition into a financial services business.
The strategy involves further development of the group’s financial planning arm and comparison website Helpmechoose.com.au
While low interest rates and a booming property market have boosted mortgage volumes across the industry, consumer confidence remains low and unemployment is on the rise.
“Consumer confidence is about 10.8 per cent below its post-election peak,” Ms Mitchell said.
“But we are seeing signs of improvement,” she said.
“The consumer confidence index is showing an increase of six per cent over the last three months.”
Fielding questions from the media, Ms Mitchell acknowledged the emergence of new digital channels but said any near-term threat is difficult to imagine at a time when more and more borrowers are using a broker.
“Broker usage has increased considerably over the last few years and this is a trend that I think will continue,” Ms Mitchell said.
“It’s a little hard to imagine any threats to the industry right now because things are going so well and the usage of brokers is actually increasing and is as high as it ever has been,” she said.
“In the long run, over the next 10 years the threats would come from changes in platform, IT changes and the way in which people deliver mortgages.”