Auswide targets brokers, HNWs for next growth phase

Auswide dropped its FY21 results on Friday, which recorded a 30.5 per cent rise in net profit from the year before, to $24.1 million.

A 10 per cent boost in the group’s loan book to $3.5 billion supported a 10.8 per cent rise in net interest revenue, to $78 million.

Housing loans, which comprised 95.5 per cent of the total book, were up by 12.5 per cent to $3.4 billion.

Business lending on the other hand, which contributed 2.7 per cent of the loan book, slimmed following a strategy change with a loan pause, down by 28 per cent to $98 million.

Consumer loans had also dropped by 22 per cent, to $63 million.

Reflecting on the home loans segment, Auswide Bank managing director Martin Barrett commented that the bank had managed to increase its market share.

Boosted broker flows across the eastern states were credited, as well as momentum in the private bank, where Auswide delivers personalised lending and deposit products to high-net-worth (HNW) individuals. Customers in the segment will span the medical, professional and sporting industries, with the bank noting their borrowing needs ideally surpass $1 million.

The group reported rapid growth in the private bank business, with a focus on quick loan turnaround times.

The private bank’s portfolio close to doubled from the year before, rising by 75 per cent to $219.5 million. 

It has also rolled out new packages targeted at professionals in accounting and law, as well as individuals working in sport (athletes, coaches and others), with the aim of expanding its market share.

“Our private bank is well positioned for significant future growth,” Auswide stated in its annual report.

“Our private bank has been an exciting growth niche for us, and we’ve seen strong momentum throughout FY21,” Mr Barrett commented. 

Meanwhile, the broker channel proved itself as Auswide’s “most significant growth opportunity”, Mr Barrett said, with the First Home Loan Deposit Scheme (FHLDS) introducing the bank to a larger pool of younger customers and brokers.

In addition to the FHLDS continuing into FY22, a slide on Auswide’s investor presentation stated that after the royal commission, the “shift in relationship between brokers and big four banks creates opportunities for smaller banks”.

South East Queensland is expected to remain an important growth area, as the largest contributor to the bank’s loan book. The region had generated $1.3 billion in loans – a 38.7 per cent share of Auswide’s total – and 10.2 per cent more in lending year-on-year.

The remainder of Queensland generated 32.5 per cent of the book, although at $1.1 billion in loans, it remained flat on year-on-year.

The proportion of the loan book outside of Queensland had risen from 25.1 per cent in FY20 to 28.8 per cent in FY21.

NSW saw 27.1 per cent growth, up to $484.7 million in loans, while Victoria was boosted by 34 per cent to $34.6 million, and the rest of Australia was up by 17.7 per cent to $195.2 million.

The bank also noted house price growth across regional Queensland and Brisbane, of 17.1 per cent and 13.2 per cent, respectively, in the 12 months to June.

The housing market is tipped to stay buoyant amid population growth, government stimulus and low rates.

The Queensland economy is “strong, diversified and growing faster than [the] national average”, the bank stated.

Digitisation is also expected to drive the bank’s future growth, with Mr Barrett commenting: “This will support us in our aim to grow our target younger customer base across the Eastern Seaboard, making it easier for our partners to do business with us, combined with delivering automation across the business and developing more efficient processes that support increased sales volumes.”

Amid ongoing lockdowns, the bank reported that as at 30 June, less than 0.1 per cent of its loan book was receiving assistance as a result of COVID impacts – compared with 8.9 per cent of the book one year prior.

[Related: PEXA continues growth path, fuelled by property boom]