Resimac gains with growth in home loan portfolio

The non-bank lender had a 19 per cent lift in annual net profit on the back of growth in its home loan portfolio.

Millions of Australians have deferred their home loan repayments due to the economic fallout of the coronavirus crisis.

Shares in Resimac lifted by as much as 7 per cent on Wednesday after the non-bank lender said it was poised to increase its market share as it delivered a bumper net profit for the 2020 financial year.

Unveiling a 19 per cent lift in annual net profit on the back of growth in its home loan portfolio, Resimac said the number of its active loan deferrals was low, now representing just 7 per cent of its loan book.

“We expect this number to materially decrease at completion of the 6 month deferral period,” chief executive Scott McWilliam said.

“The historical performance of our portfolio and long-standing funding relationships, provide a strong base to navigate the current economic environment and position the group for future growth.”

Millions of Australians have deferred their home loan repayments due to the economic fallout of the coronavirus crisis.

Commonwealth Bank said in its annual results earlier this month that as of July 31, 8 per cent of its home loans were on deferral.

For the full-year through June, Resimac booked a net profit after tax up 19 per cent to $56m.

On a normalised basis, which excludes the impact of the one-off profit on the disposal of subsidiary Paywise and the de-recognition of investment in Finsure in the prior year, net profit shot up 79 per cent to $55.7m.

While the economic uncertainty from COVID-19 was expected to continue into the new financial year, Mr McWilliam said Resimac’s investment in the digital automation of the home loan process continued to reap rewards.

“It is difficult to forecast the impact COVID-19 will have on the Australian housing market,” he said.

“However during periods of historical macroeconomic instability, the group maintained strong portfolio and profit growth whilst maintaining low arrears.

“We believe opportunity remains to increase market share through both the third party and direct channels.”