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Resimac records strong profit as book nears $13bn

The non-bank lender reported an 88 per cent rise in profit and a 14 per cent increase in its loan book over 1H21, despite a drop in the volume of new settlements.

Non-bank lender Resimac Group Ltd (Resimac) has reported that it saw normalised net profit after tax (NPAT) of $50.5 million, up 88 per cent, in the first half of the financial year 2021 (1H21).

The group noted that home loan assets under management had risen 14 per cent compared to 31 December 2019, taking the book to $12.9 billion.

Total assets under management came in at just over $15 billion for the group.

Resimac achieved the result despite a 9 per cent decrease in the volume of settlements over the half.

However, Resimac CEO Scott McWilliam told Mortgage Business that settlements still came in at $2.1 billion over the half, with the percentage decrease largely due to the disproportionately high levels achieved in 1H20.

Speaking to Mortgage Business, Mr McWilliam said: “If you look over the last two or three years, $2.1 billion is still a strong number. We're just putting it against a record number for the previous corresponding period. So, that number for us, $2.14 billion, still generates book growth greater than system.”

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He added that the lower number also reflected the “uncertainty in the market’ during the first months of the half (June and July 2020), particularly in the Victorian market during lockdown (one of Resimac’s major markets), all while coupled with “a far more competitive environment, especially for prime business”. 

The Resimac 1H21 results show that approximately 500 customers remained in active payment deferrals as at 31 December 2020.

Mr McWilliam outlined that brokers contributed approximately 85 per cent of flows in the half and would continue to take up the lion’s share of the group’s flows for the long-term.

However, the group is also looking to broaden the reach of its revamped Homeloans.com.au offering, which relaunched as a direct-to-consumer website in November 2020.

Mr McWilliam said that the group had started to see the “fruits of its investment” start to come through in December 2020, adding that the revamped brand was part of the group’s aim to grow the direct offering in tandem with the broker channel.

He said: “While 60 per cent of borrowers go through brokers, 40 per cent of consumers are choosing to have more of a direct or retail relationship. As an organisation, we see the opportunity for us to grow our AUM and grow our settlements and offer seamless service directly to customers through that brand, as we already do with brokers.”

Looking forward, Mr McWilliam said that he expected momentum in lending to continue through the rest of the financial year, particularly given the group’s investment in digitisation, its overhauling of its loan origination process, and the recent launch of Resimac Asset Finance.

“The group’s investment in the consumer and SME asset finance sector, through Resimac Asset Finance (formerly IA Group), will provide access to new markets that will contribute to diversifying Resimac’s earnings,” he said.

He told Mortgage Business: “It is an important strategy decision to provide more access to those non-mortgage products through brokers. We are looking to further broaden our suite of products under the Resimac brand through the broker channel, the same way that we've been servicing that particular distribution channel with home loans products for a few decades now. 

“Resimac Asset Finance allows us to go harder in terms of accelerating on some of those opportunities to provide further products to the broker market. And the response from our funding partners and the response from our broker partners has been overwhelming. It gives us a lot more confidence that there is an opportunity for us to grow market share in that space," he said.

“So we're really excited about the opportunity that we have with a number of brokers out there, helping them find solutions for their brokers that asset class as opposed to mortgage class.”

“Furthermore, with the housing market proving to be more resilient than expected, we are seeing opportunities to increase market share in our core home loan markets in Australia and New Zealand,” Mr McWilliam added.

The Resimac board declared a fully franked interim dividend of 2.4 cents per ordinary share, up by 100 per cent on 1H20. 

[Related: Non-bank enters Japanese market with RMBS deal]

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