Resimac portfolio surpasses $15bn after record year

Resimac Group Ltd (Resimac) has released its financial results for the year ending 30 June 2022, revealing a record year in home loan settlements following a 30 per cent increase.

According to the non-bank, FY22 settlements totalled $6.3 billion in the year, which was driven by demand for its specialist offering (largely prime alt doc loans for “customers who fell on hard times during the pandemic but have since made a financial recovery”).

In fact, its specialist offering outpaced its prime market for new settlements (with prime also seeing some run off), which Resimac said was a reflection of the “fierce” competition for prime borrowers, particularly as banks sought to attract clients with low rates and high cashback offers.

For example, the results show that in the first half of the financial year, $2.1 billion of specialist loans were settled, with $1.4 billion of prime loans settled.

Speaking to Mortgage Business, Resimac chief executive officer Scott McWilliam commented: “We were very much targeting that specialist segment and very much targeting the self-employed. And that was quite deliberate as the prime space (the lower LVR, owner-occupied, PAYG market) has been very much dominated by the banks at the moment, where they're offering a lot of very attractive deals, including cashbacks.

“So there was a real focus on markets where we believed that we could grow our book in an area that we know very, very well, and in an area where we could leverage off a strong distribution network that was probably looking for more players to be servicing that particular market.”

Settlements dropped overall in the second half (by around 20 per cent), but specialist loans still outpaced prime loans at $1.7 billion to $1.1 billion, respectively.

Resimac flagged that lower volume of loans in the second half to “seasonality” and the “short-term impact of [its] new origination system roll out”, which began in March 2022.

However, Mr McWilliam suggested that while there had been some drop off as the new system was being introduced, the lender was now “starting to see the benefits of that investment where our turnaround times for brokers, for all products today, is well inside two days”.

The CEO added that the lender looking to further digitalise the broker offering via a new servicing platform that will give brokers “better end-to-end oversight of applications”, as well as providing customers with “an improved omni-channel banking experience” to improve the post-settlement Resimac experience through a “DIY relationship where we're giving them the tools to manage their loans”.

“The next wave of transformation will leverage our new technology platform by focusing on digitalising the customer and broker experience,” he said.

Mr McWilliam added that he was delighted with Resimac’s mortgage book performance — noting that its home loan assets under management (AUM) increased 11 per cent to $15.3 billion (with specialist AUM increasing 55 per cent to $5.9 billion). 

“This is a testament to the longstanding relationships we have with our broker partners, who have been instrumental in helping to drive demand for our diverse product range,” he said, adding that around 85 per cent of the non-bank’s growth had been driven by the broker channel.

Asset finance focus

The Resimac CEO also flagged the value of brokers in helping grow its new asset finance arm, Resimac Asset Finance.

The business, which began trading last year offering car and equipment loans, grew its settlements by 212 per cent to $405 million. 

The CEO told Mortgage Business that the acceleration of the asset finance offering came as more customers turned to non-bank lenders for car loans as banks retreat from this space, and as asset finance volumes through aggregators continued to grow following a general diversification trend.

Resimac this month took a controlling stake in Sonder Equipment Finance to expand its distribution and provide more opportunities for car and equipment loans — with a view of reaching $1 billion in annual settlements by FY24.

Looking ahead, Mr McWilliam said the group would continue targeting both specialist and asset finance borrowers in FY23. 

“A big focus for us will be helping brokers serve specialist and asset finance borrowers in FY23,” he said. 

“This includes self-employed borrowers who benefit from alt-doc income verification as it better represents their financial performance. 

“We can see this being a big market as businesses further stabilise coming out of the pandemic,” Mr McWilliam said.

[Related: Resimac confirms 1st social bond in $1bn RMBS]