Powered by MOMENTUM MEDIA
subscribe to our newsletter

Non-bank feels pressure as profits slide

A listed non-bank lender has recorded a fall in profits as market pressures squeeze margins.

Homeloans Ltd announced a net profit after tax of $6.3 million, down 6.1 per cent from the $6.7 million over the 2012/2013 financial year.

Net interest income also slipped by 13.2 per cent from $9.7 million to $8.4 million.

Homeloans-branded mortgage settlements increased 13.2 per cent over the 12 months to June 30, while the lender recorded a total loan book of $7.6 billion.

Commenting on the result, chief executive Scott McWilliam said the year had been marked by intense competition, particularly heavy discounting by the major banks.

Advertisement
Advertisement

“Year-on-year, we always focus on growing lending volumes and this year was no exception,” Mr McWilliam said.

“We were especially buoyed by strong settlements in the second half of 2013/2014,” he said.

“However, continued market pressures impacted on margins, which, in turn, caused slightly reduced profit levels compared to 2012/2013.”

Noting the significant improvement in the broader residential lending market, where housing credit growth was 6.4 per cent over the year, Mr McWilliam said the company has grown its third-party and direct settlements by 12 per cent and 17 per cent, respectively.

“In line with Homeloans’ strategy of being a home loan solution provider, the company expanded its product suite in the second half of 2013/2014 with the launch of the Homeloans Optima product,” he said.

PROMOTED CONTENT


“During 2013/2014, branded loans under management increased 2.3 per cent to be $3.0 billion at year end.”

To offset margin pressures in the market, Homeloans Ltd continued to improve operating efficiencies, such as back-office process improvements, Mr McWilliam said.

“As a result, the company’s underlying operating expenses declined in 2013/2014 to $14.9 million ($16.2 million in 2012/2013),” he said.

“Lowering the company’s cost base ensures we are able to remain customer orientated.”

Non-bank feels pressure as profits slide
mortgagebusiness

Latest News

New lending commitments for owner-occupiers fell by 2.5 per cent in June, the largest monthly drop-off in around a year. ...

Non-bank lender TechLend has gained $50 million in funding from a Silicon Valley venture fund, with plans to turbocharge the growth of its b...

The RBA has announced its August rate decision as ongoing lockdowns dampen speculation about imminent rate rises. ...

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!

How long do you think it should take to discharge a mortgage?

Website Notifications

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