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ISCOVER
Staff Reporter
A conservative balance sheet funding program has helped one non-bank lender record $9.5 million in net profit after tax.
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Yesterday, FirstMac announced the profit, which is well above the company’s five year average.
The group noted that while the average cost of funding across its mortgage portfolio increased over the period, residential mortgage assets have re-priced in line with major bank margin increases, benefiting the Group’s Net Interest Margin.
FirstMac managing director Kim Cannon said the company has maintained its distribution network since the start of the GFC and continues to originate new mortgages.
“We have continued to listen to the needs of the Australian consumer and innovate our product offering to meet demand from the market,” Mr Cannon said.
“During the period we launched the online mortgage lender, loans.com.au, and have seen strong demand from customers seeking competitive rates and an alternative to the traditional lenders.
“FirstMac provides the proof that it is possible to offer home loan products with competitive interest rates and also maintain a healthy net interest margin. If we can do this, it is possible for all lenders to do.”
“We also took the step to further diversify our product offering and bring competition to another area of Australian financial services through a fixed-income managed funds product, High Livez. There was a soft release of this product during the period and a retail roll out commenced in late October 2011.”
“Since the Australian Office of Financial Managements’ (AOFM) initial round investment in November 2008, the FirstMac Funding Trusts have used the investments to greatly increase its lending activity and underpin continued competition in the home loan sector.”
“The credit quality, underwriting capability and servicing standards of the FirstMac portfolio are evidenced by the arrears performance on loans greater than 30 days, being less than 1.3 per cent, a level well below the industry standards.”
