Homeloans boosts branded mortgages but sees profits slide

The key highlight of non-bank lender Homeloans Limited's full year results, released yesterday, was its 23.7 per cent growth in branded (managed) mortgage settlements, which reached approximately $1 billion for the year to 30 June.

However, the lender saw its net profit after tax fall by 9.8 per cent, from $6.3 million to $5.6 million, over the period.

During the last financial year the non-bank lender completed its acquisition of Queensland-based mortgage manager Barnes Home Loans.

Homeloans yesterday noted in a trading update that Barnes had funds under management of $0.5 billion as at 31 December 2014.

“Since acquiring Barnes in February 2015, Homeloans has continued to grow the company’s presence on the east coast of Australia, while implementing systems to reduce costs and eliminate process duplication between Barnes and Homeloans,” the group said.

“Importantly, Homeloans continues to offer brokers and customers competitive products and quality of service. This offering ensured Homeloans has been able to maintain its position as a viable alternative to the major banks during [the] 2014-15 financial year – a year characterised by historically low interest rates and strong activity in home lending across all major states,” it said.

Homeloans’ CEO, Scott McWilliam said the group are pleased with settlements growth of 23.7 per cent achieved in the year and that Homeloans remains in a strong position, with the positive trend in submission and settlement activity in the first half of the 2014-15 financial year continuing into the 2015-16 financial year.

“In addition, recent industry fragmentation has seen lenders moving to differentiate on policy and pricing, which should benefit Homeloans with its diversified funding base,” he said.

“We remain actively focused on assessing and pursuing potential inorganic opportunities that would assist in diversifying and growing the business into the future."

Mr McWilliam acknowledged the support and contribution to the company over many years of Mr Tim Holmes, the group’s former chairman and founding director, who passed away during the year.