Resimac takes control of International Acceptance Group

Resimac goes all-in, scooping up the remaining 40 per cent of the asset finance lender International Acceptance Group.

Resimac CEO Scott McWilliam in his Sydney offices. Picture: John Feder/The Australian.

A year after taking a 60 per cent stake in International Acceptance Group, non-bank lender Resimac has gone all-in, scooping up the remaining 40 per cent of the asset finance lender as it expands further beyond its roots.

In an exclusive interview with The Australian, Resimac chief executive Scott McWilliam said IA Group’s performance through the coronavirus pandemic spurred his decision to move early and exercise the option to buy the remaining 40 per cent of the business ahead of schedule.

“IA Group was tested during a very difficult and challenging period, and the book and business has performed, I’d argue, better than anybody else in that space.

“Having had the opportunity to look at that business and how it operates and performed during a challenging period, it obviously gives us a lot of confidence that it was the right acquisition and a great starting point for the Resimac group to move into the asset finance space,” Mr McWilliam said.

ASX-listed Resimac took the initial controlling stake in Sydney-based IA Group in January 2020, saying it was in line with its strategy to diversify the business and would see it expand into new secured asset classes.

As part of the deal, Resimac had the option to acquire the remaining 40 per cent, for $8m.

IA Group, with a loan book of $80m, was established in 2001 and offers lending products such as asset finance, secured business loans, personal loans and car loans to both consumers and commercial businesses.

After Resimac takes full ownership on February 1st, it will be renamed Resimac Asset Finance, joining other businesses within the Resimac Group, including Resimac, Resimac NZ and homeloans.com.au.

Launching Resimac Asset Finance was a natural progression for the company, Mr McWilliam said.

“Diversification is a key strategy for the continued growth of Resimac Group, and Resimac Asset Finance will play a major role moving forward.

“While IA Group is already profitable today, our objective is for it to be a significant contributor to the group’s profitability within the next five years,” he said.

IA Group’s loan book had grown more than 50 per cent over the past year, he added.

“It’s off a low base but we’ve seen enough to know we like the credit we’re originating. The performance of that book, in terms of deferrals, has been exceptional. At the high, deferrals were 3 per cent of the book; today that sits at less than 1 per cent,” he said.

The new Resimac Asset Finance will also benefit from the group’s existing infrastructure, including its global securitisation program, established distribution networks and robust risk management framework, Mr McWilliam said.

The expansion of its asset finance play comes as Resimac ramps up its efforts to improve its technology and credentials as a digital non-bank in the highly competitive mortgage market.

The transformation project, which started about 12 months ago and is expected to wrap up in the 2022 financial year, sees ASX-listed Resimac partnering with global players and moving to a cloud-based system.