Homeloans bucks the trend

The lender, broker and mortgage manager, Homeloans Ltd, yesterday reported a big increase in lending volumes during the December half - one of the few participants in the home loan market to produce a strong performance in the half.

The company's lending volumes were up 59 per cent on the previous corresponding period. The loan book increased 3.7 per cent, from A$5.4 billion to A$5.6 billion.

Higher lending volumes resulted in a 42 per cent increase in net fee and commission income - up from A$5.9 million, in the six months to December 2009, to A$8.4 million in the latest half.

Net profit was down four per cent, to A$4.4 million, but, after adjusting for the cashflow impact of a A$35.7 million return of capital, cash earnings were up three per cent.

Homeloans' executive chairman, Tim Holmes, said the business had languished during
the financial crisis and was coming back off a low base.

Holmes said: "We did a lot of work on our brand and we were aggressive in
increasing our distribution. We added new sales offices in Queensland and Western
Australia."

The company signed up football stars Shane Webcke (rugby league) and Matthew
Pavlich (Aussie rules) to front a new television, online and outdoor campaign.

A little over A$400 million of the group's loan book is funded through securitisation, but
 it has not undertaken a securitisation transaction since the start of the financial crisis, although Holmes said a deal might not be far away.

However, there has been no restriction on wholesale funding available to the group from Advantedge, Adelaide Bank and ING Direct.