Homeloans lifts profit on less lending

Homeloans Limited, a listed mortgage manager, yesterday reported higher earnings in spite of running down its mortgage book. Profit increased 15 per cent to $2.6 million while the mortgages under management fell 13 per cent to $803 million.

The company made allowances for losses on impaired loans of $2.8 million.

Homeloans still has around $44 million in cash at the bank, largely thanks to an investment in 2007 from Challenger. A small amount of this cash is being used to buy back shares (that now trade at around 35 cents), though the company remains open to buying niche mortgage businesses.

Challenger, ING and Bendigo Bank remain the main funders for Homeloans' mortgage book.

GE Capital was also a funder, though borrowers have missed out on interest rate cuts thanks to GE's pricing decisions.