Liberty reports growth in profit originations and total assets

17 Oct 2018 | Share:
  • Before tax profit $83.9m (2017: $76.3m) (+10%)

  • New loan originations $4.3b (2017: $3.7b) (+15%)

  • Total assets of $10.2b (2017: $7.5b) (+35%)

  • Issued $4.9b in asset-backed and senior unsecured securities

  • Investment in ALI Group

  • Acquired MoneyPlace and integrated National Mortgage Brokers

Leading non-ADI lender, Liberty Financial Pty Ltd (Liberty) today reported a 10 per cent increase in consolidated profit before tax to $83.9 million (vs $76.3 million) following a 15 per cent increase in new loan originations to $4.3 billion.

Liberty now has total assets of $10.2 billion (vs $7.5 billion) across a balanced portfolio of residential, commercial, motor and personal loans.

James Boyle, Chief Executive Officer, said the result reflected the success of Liberty’s agile and innovative focus on the customer experience, resulting in the continued development and delivery of solutions that have helped customers responsibly achieve their financial goals.

“Key initiatives for delivering on the Group’s purpose of helping customers ‘get financial’ included significant growth in home, commercial and motor lending. In addition, the investment in ALI Group, as well as the acquisition and integration of MoneyPlace and National Mortgage Brokers (nMB), extended the way Liberty Group helps more customers,” Mr Boyle said.

ALI Group has helped protect more than 187,000 Australian home and property buyers from financial hardship, providing almost $52 billion in loan and mortgage protection since 2003. MoneyPlace offers direct-to-customer personal loans of between $5,000 and $45,000 and nMB supports more than 400 brokers around Australia to help connect customers with the right lender.

Mr Boyle said that Liberty was closely monitoring the changing regulatory and consumer environment. “We continue to focus on evolving community standards and expectations in order to ensure that our products and services meet those standards.”

“Liberty is growing and, as a non-ADI lender, is becoming even more relevant in the changing financial services environment. We are clear about the role we play in bringing choice and competition to the market in a responsible and sustainable way,” Mr Boyle said.

Peter Riedel, Chief Financial Officer, said the strong profit growth of 10 per cent reflected the measured growth of a business with a balanced portfolio of products and services.

“Total finance income grew by 46 per cent to $622 million (2017: $426 million), while total operating expenses increased by 28 per cent over the same period. The increase in finance income was driven both by an increase in finance assets as well as contribution from the acquired businesses,” he said.

Impairment charges for the year increased to $19.2 million (24bps of average finance assets) compared to $12.6 million (22bps) in FY17, reflecting growth in the portfolio of finance assets.

The increase in total assets to $10.2 billion (2017: $7.5 billion) reflects the growth in new residential, commercial and motor vehicle loans and a stable average life of loan. Net equity has increased to $622 million in line with the continued approach of recapitalising 100 per cent of its profits. The business achieved a ROE of 15 per cent and has a risk-adjusted capital ratio of 15.3 per cent which is supportive of its investment grade rating of BBB- (stable outlook).

“The global capital markets continued to strongly support Liberty’s funding program in 2018. Over the year, Liberty successfully priced six asset-backed and senior unsecured note issues raising $4.9 billion of total funding. This included an issue of $1.5 billion in April 2018 which was the largest ever public issue of non-conforming loans by a non-bank,” Mr Riedel said.

Mr Boyle said while the financial services environment was currently being re-shaped, helping customers help themselves to ‘get financial’ will continue to be Liberty’s goal.

“We understand the key to adding significant value to customers achieving financial goals is finding the solutions that customers want. For Liberty this means an unrelenting commitment to ongoing learning, continuing to innovate and, most importantly, putting our customers’ needs first,” he said.