MA Financial cautious amid untested private credit world

Diversified financial operator MA Financial has flagged ‘materially higher’ earnings for the year ahead but warns the private credit market remains untested in tough times.

MA Financial joint CEOs Chris Wyke and Julian Biggins

The growing private credit sector is yet to be tested, which ‘mini-Macquarie’ MA Financial cautioning its expertise in tough situations will be key to its growth plans after posting a 46.7 per cent profit jump.

The ASX-listed diversified financials group, which boasts operations in lending, asset management, property plays, as well as deals advisory, ruled off a $41.8m full year profit on Thursday, touting more to come.

MA Financial told shareholders its earnings in 2025 would be “materially higher” than its 2024 results, with the firm’s joint-chief executives Julian Biggins and Chris Wyke claiming the group’s “great shape” was poised to deliver “strong earnings growth into the future”.

MA Financial recently outlined plans to launch a listed investment trust offering access to its growing $3.7bn private credit business.

Mr Wykes said private credit was here to stay, noting the sector was riding on the retreat of the banks from parts of the lending market.

But he warned private credit had not been through a tough economic cycle that tested its underwriting standards.

“I was here for the Global Financial Crisis and I saw what a cycle was,” he said.

“We haven’t seen that. This is going to be a real test of managers and underwriting.“

Unravelling its results, MA Financial told shareholders its lending, asset management, and corporate advisory businesses had all seen growth in the period.

This included a 12 per cent jump in assets under management to $10.3bn, with recurring revenue margins lifting to 1.61 per cent “slightly ahead of guidance”.

Ma Financial said lending business was also growing, with Finsure managed loans up 26 per cent to $139bn, while the MA Money loan book also lifted 155 per cent to $2.1bn becoming profitable in the second half of the financial year.

Net interest margin on the MA Money loan book lifted to 1.4 per cent in the second half of the financial year.

Mr Wykes said it was tough to determine what could be the looming “Black Swan” for private credit.

“I don’t know what the catalyst will be but you need to be prepared with the underwriting and your debt and your terms to be in a position to protect your investment through tough times,” he said.

“Private credit is very different to equities; the upside is capped and the downside is the same as equity.”

MA Financial is largely targeted at the Australian economy, but with offices in several Asian cities and North America the business is increasingly going global.

Mr Wykes said comparisons to rival financial giant Macquarie, which also started in Australia before going global, were “very nice” but didn’t reflect the nuances of MA Financial.

“We’re not in infrastructure but we are in real estate,” he said.

“We want to be builders of valuable businesses in large addressable markets,” he said.

MA Financial declared a 14c final dividend, fully franked.

This takes total returns to 20c per share, full franked, in line with the 2023 financial year.

Shares in MA Financial closed up 8.67 per cent, or 65c, to $8.15 on Thursday.

Originally published as MA Financial cautious amid untested private credit world