Mixed result for Homeloans

Homeloans Ltd has had mixed results from increased investment in brand and distribution, with a pick-up in loan settlements during the year to June but no organic growth in its loan book.

After reporting falls in its loan portfolio and earnings in 2012/13 and 2013/14, the company started investing in product development, working with brokers to identify product niches, and trying to improve the efficiency of its loan assessment processing and "on-boarding".

The value of loan settlements rose 14.9 per cent to A$1.8 billion during the year to June. This was a little below system growth; according to the Australian Bureau of Statistics the value of new housing finance commitments rose 15.6 per cent in the year to June.

The value of the loan book grew 6.6 per cent to $8.1 billion. However, all of the growth was accounted for by the acquisition in February of Barnes Mortgage Management, which had a $500 million loan book.

On a like-for-like basis the Homeloans portfolio did not grow at all, while system growth for the year to June was 7.3 per cent. At least the company arrested the slide of the past couple of years.

Homeloans made a net profit of $5.6 million for the 12 months to June - down 9.6 per cent from the previous corresponding period.

Net interest income fell 6.6 per cent to $7.8 million, while net fee and commission income rose three per cent to $15.3 million.

The company said it would continue with its focus on extending its distribution channels, building national brand recognition and looking for more acquisition opportunities.