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Broker flows helped Liberty Group achieve record loan originations over the financial year 2024, despite mortgage growth having plateaued.
ASX-listed financial services company Liberty Group has released its full-year results for the financial year ended June 2024, in which it revealed that while residential lending origination for the non-bank lender was flat over the year – at $3.0 billion – brokers had helped achieve record loan originations across other parts of the group.
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According to the group’s CEO James Boyle, residential originations for Liberty Financial have been recovering in the past year, with discharges slowing and new originations picking up in the second half of FY24.
Indeed, residential mortgage originations increased from $1.51 billion in 1H24 to $1.53 billion in 2H24, with its total book growing to just over $8 billion at the end of FY24.
However, as this followed on from “subdued levels of credit growth” – after strong competition in residential lending and high rates saw its volumes slow last year – its residential loan book is still smaller than it was at the end of FY23 (when it was $8.09 billion).
Around 90 per cent of its book is originated by the broker channel.
Liberty Group, however, has a diversified portfolio.
Its secured arm (comprising motor vehicle, commercial, and self-managed superannuation fund lending) makes up 39 per cent of its book while its financial services arm (including unsecured lending brand MoneyPlace, aggregation groups Liberty Network Services [which recently welcomed a new CEO], National Mortgage Brokers [nMB], and Australian Life Insurance [ALI]) makes up 6 per cent of its book.
While Liberty Group does not report the flow of loans written by its aggregation groups, it did reveal that the secured and financial services segments saw record origination volumes over FY24.
The secured part of the business recorded $2.1 billion in originations over FY24, an increase of 5 per cent on FY23. This took its loan portfolio to $5.6 billion.
Meanwhile, the financial services side had a record $535 million in originations – a 35 per cent increase on FY23. This took the total portfolio for financial services to $866 million.
As such, its total loan portfolio totalled $14.6 billion at the end of FY24, reflecting a boost of 8 per cent on FY23.
Liberty moving to accept online applications
The group has also established new facilities to support anticipated growth in secured and residential lending (totalling $1 billion).
Speaking to The Adviser, Boyle said that the personal lending arm was growing as it was “a really good, immediate, fast solution for customers who might be renovating, might be vacationing, or might be buying a car”.
“It’s a readily available, easy solution for customers who have short-term financing needs,” he said.
Boyle said that he believed there was a growing awareness of access to personal lending, partly driven by brokers, which was also a contributing factor to record origination growth.
“I think awareness of personal loans – and the ease in which they can be accessed either by a broker or online, is growing. Often, what we find is that customers do a bit of research online, they’re looking for a short-term solution and they recognise that a personal loan might suit them. Then they approach their broker, and – in our case – Moneyplace has done a great job in working with brokers to help them provide that solution for their customers,” Boyle said.
He said that personal loans were also popular with brokers as the short-term nature of the loans provides “a great way for brokers to stay in touch with their customer base”.
Boyle said: “A new home loan isn’t taken out every year, or even every couple of years. For some people, it’s a once-in-a-lifetime need.
“But change and challenge often delivers the need for short-term finance. And personal loans are a great way for brokers to help their customers in their circumstances.
“Having achieved record new loan originations across existing and new businesses, along with an anticipated stabilising net interest margin, we are optimistic about the opportunities the coming periods will present and will continue to invest in the business to generate future value.”
Boyle told The Adviser this includes making investments in Liberty IQ so it can accept online applications. This would help “make it easier for brokers to connect with [Liberty’s] products”.
In conclusion, the Liberty CEO reflected on how brokers have been strongly contributing to Liberty Group’s growth, saying that its commitment to brokers would continue: “We built this business growing up with the mortgage broking community. We feel like we’re very much part of the industry; we were there almost at the start.
“We continue to champion the great work that brokers do, and appreciate it and work in partnership with them to bring excellent and diverse solutions to customers. And we don’t want to change that; we think the strength of the broker offering has been absolutely recognised and vindicated, through challenges like COVID-19 and even through the GFC … And we see more customers going and seeking broker support than at any point in history. So we’re very content and very invested in our partnership with brokers.“
[Related: Challenging conditions to continue: Liberty]
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