Resimac reports 13% profit growth

Resimac has released its 2019 half-year (HY19) financial results, announcing a normalised net profit after tax (NPAT) of $14.5 million, up 13 per cent from $12.9 million in HY18.

The result was driven by an increase in uptake of Resimac’s principally funded mortgage products, with settlements rising by 7 per cent to $1.93 billion.

Settlements of non-principally funded loans, however, declined by 17 per cent, from $360 million in HY18 to $300 million.

Resimac reported total settlement growth of 3 per cent to $2.2 billion, with assets under management (AUM) of $12.8 billion at 31 December 2018, an annualised increase of 13 per cent in HY19.

The group’s AUM consisted of principally funded assets of $9.4 billion (19 per cent annualised growth), and non-principally funded assets of $3.4 billion (4 per cent annualised decrease).

Reflecting on the result, Resimac CEO Scott McWilliam said that the group’s home loan portfolio has grown off the back of an “ongoing program of customer-focused process improvements”.

“This was a pleasing result, with our principally funded book growing 19 per cent annualised (c5x system),” he said.

“Net interest income increased 8 per cent compared to the previous corresponding period despite a higher bank bill swap rate driving higher cost of funds.”

Mr McWilliam continued: “Expenses were broadly flat, driven by our process improvement program, reducing the cost-to-income ratio by 420 basis points.

“The recent automation of workflow management will also help to achieve further efficiencies, but most importantly, enhance our customer proposition.”

The Resimac CEO added that the group’s decision to rebrand has been well received by mortgage brokers and consumers, claiming that it would position the lender for continued growth and allow it to pursue a “diversified distribution strategy”.

The CEO also reiterated the bank’s support for the broker channel amid calls for reform to the industry’s remuneration model.

“We will continue to be an active supporter of the broker channel via the MFAA campaign and other avenues and work with the industry to ensure that consumer choice remains a priority,” Mr McWilliam concluded.

 [Related: ANZ CEO rues ‘overly conservative’ lending policy]