Mortgage broker AFG says profit up 14% as credit market picking up

Mortgage broker Australian Finance Group (ASX: AFG) reported a rise in half-yearly profit of 14% from the same period in the previous year, helped by the strong performance of its AFG Home Loans division.

AFG’s loan book now sits at $127 billion, with the overall residential loan book growing to $120.7 billion from $114.7 billion to in the six months to December 2016. 

It said although start to the year was slow, the lending market in Australia is now picking up and mortgage brokers are winning market share. 

The company expects the mortgage broker market penetration to grow as “an increasing number of consumers recognise that a mortgage broker is in the unique position of being able to provide a comprehensive view of the alternatives available across lenders and products”. 

AFG managing director Brett McKeon said the results reflect the broker’s focus on maintaining a strong core broking business. 

“Consistent growth in our distribution network has assisted in generating a strong result for our own branded AFG Home Loans business. Total AFGHL settlements were $1.24 billion, up 34% from the same period last year and represented 7.2% of AFG’s total residential settlements for the period,” he said.

“Importantly our AFGHL book now stands at $4.6 billion which together with strong settlements has helped deliver a profit before tax for the AFG Home Loans business of $4.8 million up 97% from HY16.”

The company said its net profit after tax was $13.4 million for the six months ending December 31, 2016.

It also announced an interim dividend of 4.2 cents per share, an increase of 40% on the prior period.