Yellow Brick Road executive chairman Mark Bouris says the group is well positioned to grab a bigger slice of the Australian mortgage market.
According to the company’s full-year results, released this week, YBR now accounts for more than four per cent of the nation’s home loan settlements.
Mr Bouris is looking to boost YBR's mortgage market share, viewing the the current lending landscape as the perfect time to take advantage of new opportunities.
“The lending landscape is changing: banks have raised their rates out of cycle, while the regulator is acting to cool investor lending and requiring banks to set aside more regulatory capital,” Mr Bouris said.
“As a disrupter, these changes look to us like opportunities.
“These changes provide an opening for a business like ours to drive our initiatives forward and take new territory from the banks.”
Mr Bouris last month revealed plans to establish a securitisation program, leveraging off YBR’s increased size and scale with the acquisitions of Vow Financial and Resi Mortgage Corporation.
Further explaining the opportunities of the program this week, Mr Bouris said securitisation would give YBR “free rein to move rates”, enhance its product funding options and significantly improve its margins.
YBR has already recorded a 140 per cent increase in its corporate margin over the year to 30 June.
According to a company statement, the acquisition of Resi Mortgage Corporation included Resi’s mortgage manager capability; the products created through this model increase margins by 10 to 20 per cent above that of regular white-label mortgages and double that of brokered loans.
Distribution, diversification, margin and brand have been the focus of YBR’s business since inception.
“When we floated, over four years ago, we announced our ambition to achieve an operating break-even performance by 2014-15,” Mr Bouris said.
“We are now profitable on an underlying basis, excluding acquisitions, integration and abnormal costs. This is an improvement in the vicinity of $6 million on our 2013-14 operating position.
“The company has released six new products since our last annual report. In line with our plan to be the leading non-bank financial services company in Australia, we have continued to launch service offerings and products to cover all key financial services relevant to young Australian families and small businesses, with a full range of in-house and third-party lending and wealth management."
Mr Bouris noted that YBR is four times bigger than it was a year ago.
With the addition of the loan books under Vow Financial and Resi Mortgage Corporation, YBR’s combined loan book under advice now sits at $30.8 billion.
YBR mortgage settlements increased by 42 per cent compared with last year on a normalised basis, with $12.6 billion in loans serviced in 2014-15.
“It’s the shared commitment, vision and tractability of our branches, brokers, staff and shareholders during this time of opportunity that makes our future so exciting,” he said.