subscribe to our newsletter
Non-bank feels pressure as profits slide

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.

“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.

“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 logo

Latest News

Two lenders have announced rate changes on their home loan offerings, with rises of up to 40 basis points. ...

The major bank has announced the appointment of a new group treasurer to replace Rick Moscati, who has been embroiled in an ongoing investig...

The corporate regulator has issued guidance in relation to its oversight of a newly formed external dispute resolutions body, the Australian...

Promoted Stories

podcast

LATEST PODCAST: How the market has changed in the last 25 years, royal commission hearings, broker advocacy

Do you expect access to credit to get harder this year?