Liberty Financial is carving a new business in dealer finance as well as funding car loans for consumers.
Seeking to fill a void created by the exits of Westpac and Macquarie Bank from this niche, auto finance now represents A$700 million of $12.5 billion in receivables for the recently-listed non-bank financier.
Liberty yesterday reported a 40 per cent rise in net profit, to $117 million, for the half year ended December 2021. After allowing for IPO expenses and non-cash amortisation, Liberty put its underlying NPAT at $122 million, a rise of four per cent.
The group reported a rise of 7 basis points to 3.14 per cent in its net interest margin, one of the widest in the industry.
While keeping tabs with system credit growth, the dynamic of its core mortgage market business has tested Liberty. Its core residential book is down to 69 per cent of the portfolio from 72 per cent two years ago, partly a function of a loss in market share but also the pivot to motor and secured finance.
“The continuing dislocation in the mortgage finance market has challenged us,” James Boyle, Liberty’s CEO told an analysts’ briefing yesterday.
“All the big banks will be less aggressive with their pricing in the coming period,” he said, anticipating margin tailwinds.
Liberty has a 20 per cent stake in Avenue Bank, allocated a restricted banking licence by APRA late last year.
Avenue “is working hard on getting product to market, ” Boyle told Banking Day.
On the other hand, Moneyplace – another recent fintech acquisition – “is going really well … fast-paced,” Boyle said.