Yellow Brick Road is planning the launch of a digital brand, Y Home Loans, to meet what it sees as growing demand for online home loan sales.
YBR executive chair Mark Bouris said yhomeloans.com.au will be up and running this financial year.
In his executive chair’s report in the company’s annual report, Bouris said: “The digital transformation is not just about giving customers the choice of how they make an application for a home loan. It’s about understanding the behaviour of customers from the moment they are thinking about buying a home… and to service them in a way that they get the best value by choosing us.”
Other plans for 2021/22 outlined in the report include increasing the number of independent brokers affiliated with its aggregator business, Vow, from 1243 to over 1300, and adding 100 brokers or branches to the Yellow Brick Road network (the number of brokers in the network currently was not provided).
The company’s big initiative in 2020/21 was launching its own mortgage product. In November 2019 YBR formed a joined venture with asset manager Magnetar Capital to build a mortgage-backed securitisation business.
The joint venture, Resi Wholesale Funding, launched its first product in July 2020 and went through eight months of trials. Bouris said the portfolio reached A$130 million by the end of August this year.
YBR reported a loss of $460,000 for the year to June, falling from a profit of $5.9 million in 2019/20. The company said the 2020/21 result was affected by a non-cash item of $5.2 million – a downward revaluation of the present value of future net trail commissions.
Settlements grew 16 per cent to $13.3 billion and the value of the underlying loan book grew 2.9 per cent to $51.7 billion. On both measures the company underperformed the broader market.
Revenue from continuing operations fell 9 per cent to $147 million. The company was unusually disciplined on the expenses side, reducing total expenses by 7 per cent to $166.4 million.
Cash flow from operating activities was $874,000 – down from $3.7 million in 2019/20.