Resi loan discharges ‘higher than trend’ at Liberty

Non-major bank Liberty Financial has released its financial results for 1H24 (ended 31 December) and found that its overall loan book has increased 4 per cent, surpassing $14 billion in financial assets.

Liberty Financial’s residential loan portfolio decreased from $8.3 billion in 1H23 to $7.9 billion in 1H24. This was due to “higher than trend discharges and amortisation”, according to the bank.

The downward trend was also evident in 2H23 that reported $8.1 billion, a $255 million drop from the previous period.

However, financial service loans with the bank, particularly personal loans, increased significantly, rising to $759 million from $496 million in 1H23.

The bank reported that its overall loan portfolio is continuing to swing toward “higher yielding secured and financial services assets”.

Residential loan originations improve

Overall loan originations rose by 13 per cent from 2H23 as residential loans, financial services loans (including personal loans and SMSF products), and secured assets all rose in 1H24.

Liberty Financial saw a significant drop in residential loan originations in 2H23, dropping to $1.3 billion from $1.7 billion in 1H23. The bank reported that new residential loan originations have begun to recover in 1H24, rising to $1.5 billion.

Residential loan originations, however, remain 14 per cent lower than 1H23.

Liberty Financial attributed the decline in residential mortgage originations to lower credit growth and current cash rate conditions.

As interest rates have now begun to stabilise, following the Reserve Bank of Australia’s (RBA) recent decision to hold the cash rate at 4.35 per cent, Liberty Financial has seen a recovery in credit growth and mortgage originations.

James Boyle, chief executive of Liberty Financial said: “Having achieved record new loan originations across existing and new businesses, along with an anticipated stabilising net interest margin, we feel optimistic about the opportunities the coming periods will present and will continue to invest in the business to generate future value.”

[Related: Liberty appoints chief distribution officer]