AFG grows well ahead of system

Mortgage aggregator Australian Finance Group has demonstrated the strength of its franchise with strong growth in settlements and the value of its loan book in the year to June.

In its first financial report since listing on the Australian Securities Exchange in May, AFG reported a pro forma net profit of A$19.3 million for the year to June - eight per cent above the prospectus forecast.

Statutory net profit was $20.4 million but the company adjusted for IPO expenses and discontinued business to come up with the pro forma result.

Residential loan settlements were up 19 per cent to $31.2 billion and commercial loan settlements were up 23 per cent to $2.4 billion. Both results were above system.

The loan book grew 13 per cent to $106.9 billion, which was almost double system growth.

AFG chief executive Brett McKeon said the company had added six new lenders to its panel, including Bank of China, and was looking to add more in the current year.

AFG also launched its own home loan product, Edge, which is funded by National Australia Bank. Edge settlements reached $460 million.

McKeon said the company was close to launching another mortgage product range, Icon, which would have a different funder.

McKeon said: "With Icon we will target high end brokers and high end customers. The range will include loans with global limits, family guarantees and a superannuation fund loan."

AFG chief financial officer David Bailey said low interest rates had put pressure on the group's margin but it had been able to offset this by lowering its cost of funds by negotiating a new warehouse arrangement.

AFG services 2394 brokers - up from 2300 at the time of the IPO.

McKeon said the company was looking at a range of new products to offer its brokers, including personal loans and SME asset finance.