MA Financial loan book up 59%

ASX-listed MA Financial Group has revealed in its financial results for the six months to 30 June 2023 (1H23) that the total loan book for its lending arms MA Money and Specialty Finance grew 59 per cent ($564 million) on 1H22.

The group’s residential mortgage lender, MA Money (which it fully acquired in 2022 and was formerly known as MKM Capital), grew its loan book by 85 per cent on 1H22 to $421 million as monthly loan settlements accelerated over the half.

However, according to MA Financial, the investment made on MA Money as it launched a new mortgage product put a drag on overall performance, leading to a loss of $1.6 million EBITDA in over 1H23, with losses expected to increase in 2H23 as it continues to scale and position for long-term growth in the market.

The group further stated that while loan volumes were “in line with expectations”, competitive pressure had an impact on MA Money’s loan margins and, as a result, the lender is targeting to break even in early 2H24.

Despite this, the group still expects MA Money to deliver NPAT of $15–$20 million in FY26 as heightened competitive pressure subsides and momentum accelerates.

Additionally, the group announced that aggregator Finsure’s managed loans grew by 18 per cent on the previous corresponding period to $99 billion, adding 206 new brokers to its platform during the half.

Total brokers on the aggregator’s platform rose to 2,846 with the addition of the new brokers as it continued to gain market share.

The group revealed expenses were up 58 per cent due to investment in Finsure to further facilitate growth and the roll-out of emerging technology platform Middle to brokers, which the group expects to “become revenue generating in 4Q23”.

MA Financial joint chief executives Julian Biggins and Chris Wyke said: “We are very pleased with the underlying momentum in the business which positions MA Financial for strong future growth.

“The composition of our earnings improved significantly with growth in recurring revenue and expense management largely offsetting the decline in performance fees.

“Despite the challenging economic backdrop, we continue to see the benefits of our diversified business model, and our intentional strategy to build a business that can deliver for investors through the economic cycle.”

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