AFG sees surge in commercial mortgages

The company yesterday reported a pro forma net profit after tax (NPAT) result of $19.3 million for the 2015 financial year, approximately 8.4 per cent ahead of prospectus forecasts of $17.8 million, and an increase of 19.8 per cent compared with the pro forma $16.1 million in the 2014 financial year.

AFG managing director Brett McKeon said the 2015 result was underpinned by another strong period of settlement growth primarily by the group’s residential mortgage business but also by its commercial mortgage business.

“We have grown our residential settlements year-on-year by 19 per cent and our commercial settlements increased by 23 per cent, both of which represent record years of settlements,” Mr McKeon said.

“AFG enters the new financial year in a strong position with a combined residential and commercial loan book of $107 billion.”

The last three months in particular were very strong in terms of settlement volumes for the commercial business, giving rise to overall year-on-year settlement growth of $450 million or 23 per cent, according to a company statement.

“Of this growth, around nine per cent was due to an increased average loan size, which grew to just over $0.8 million during the 2015 financial year,” it said.

The surge in commercial mortgage settlements was strongest in Victoria, followed by NSW and Queensland.

Victoria has the highest number of AFG brokers in Australia at 636, compared to 616 in NSW, 519 in Queensland, 474 in WA and 149 in South Australia.

AFG said yesterday that growing its commercial mortgage broking business was a central part of its overall growth strategy.