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In a Monday ASX trading update, YBR executive chairman Mark Bouris noted that the mortgage sector has experienced “considerable change in recent times”.
“In the last couple of months our industry has observed tightening around investment lending and the majority of the banks have announced, in the last few weeks, an out-of-cycle interest rate increase for investor clients,” Mr Bouris said.
“At Yellow Brick Road Holdings, we have been building our company strategy and business model around such a shift in the market,” he explained. “These changes afford a great opportunity for a business like ours.”
As the banks respond to APRA with tightened lending criteria and higher home loans rates, YBR sees an opportunity to service property investors forced to obtain finance from alternate lenders.
In addition, the group believes it can capitalise on these increasingly complex times that will encourage investment borrowers to seek advice.
Mr Bouris said YBR’s acquisitions of Vow Financial and Resi Mortgage Corporation, combined with the growth of the Yellow Brick Road branch network, have given the group the size, scale and capability to establish a securitisation program.
YBR has existing partnerships with Macquarie Bank, which funds the group’s white-label home loans. Earlier this year YBR rebranded its white-label offering to Vow Home Loans following its acquisition of the aggregator.
In Monday’s trading update the group said that as a consequence of its acquisitions its corporate margin had increased 140 per cent year-or-year.
Mr Bouris said the group’s next venture – mortgage securitisation – complements YBR’s existing funding partnerships and will enhance its funding options in mortgages and improve margins.
“Furthermore, it will provide the capability for us to develop new offers to take to market, including personal lending,” he said.
YBR has also revealed aspirations to create direct consumer and SME business in lending and wealth, is reviewing acquisition opportunities in direct personal lending and will launch a mortgage life insurance product later in the year.