Rising arrears and higher charge-offs have Resimac in a bind.
Arrears of 90 days or more on sub-prime loans rocketed to 2.32 per cent at the end of December 2024, up from 1.24 per cent in June. This is the highest arrears rate so far this profit season for any mortgage funder.
Arrears on prime loans more than doubled to 0.81 per cent from 0.41 per cent.
The impairment expense of $14.8 million in the December 2024 half of $14.8 million was up from $2.4 million in the corresponding half.
Net profit for the half year fell to $13.5 million from $20.4 million.
Susan Hansen, interim CEO commented: “The past six months have presented challenges for households and small businesses due to higher-than expected interest rates and the increasing cost of living. These economic pressures have affected the performance of our loan portfolios, as evidenced by rising arrears, financial hardship applications, and defaults, resulting in increased write-offs and collective provisioning.
“The much-anticipated interest rate reductions expected in the 2025 calendar year will be a welcome relief to our customers.”