A shrinking mortgage book, docile new business volumes and higher expenses smashed the earnings of non-bank lender Resimac over the last year. Resimac’s home loans under management fell A$2.2 billion, or 14 per cent, to $13.1 billion over the year to June. Prime loans under management decreased 23 per cent to $7.0 billion “driven by low settlements, combined with aggressive run off as cashbacks and low new business rates dominated the market,” Resimac said. Specialist loans under management “remained broadly flat at $5.8 billion, albeit decreased 5 per cent in 2H23”. Over the financial year, home loan settlements fell 40 per cent to $3.7 billion, “reflecting lower system purchase activity and fierce market refinance competition”. Settlement volumes in the second half of $1.3 billion were less than half those achieved in the first half. Loans 90 days or more in arrears worsened dramatically over the year, rising to 0.57 per cent for the prime book at the end of June, compared with 0.14 per cent a year earlier. For the specialist loan book 90 day arrears were 1.31 per cent up from 0.38 per cent a year before. Asset finance settlements of $482 million this year were up 19 per cent over the year, offsetting some of the torpor in the mortgage book. Asset finance growth is a key priority for Resimac this year, with the lender targeting $1 billion of settlements in FY24 “driven by our new digital originations platform and increased broker penetration”. Net profit for Resimac in FY23 plunged to $66.5 million from $102.1 million in FY22. Its return on equity (using a “normalised NPAT”) was 18.6 per cent this year, down from 34.6 per cent last year.