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Highlights
- New mortgages up by 13% in H1
- $1.7 billion in fresh lending recorded
- Net profit edges higher with steady dividend
In the latest financial period, Liberty Financial Group (ASX:LFG) reported a significant expansion in its new mortgage portfolio, signaling positive momentum in a competitive lending landscape. The non-bank lender recorded a 13% rise in newly originated mortgages during the first half of the financial year, reflecting robust credit demand despite an overall home loan book that remained largely unchanged due to higher-than-anticipated discharges.
A key driver behind the increased lending activity was the steady interest rate environment, which has contributed to an environment conducive to credit growth. With new lending reaching a noteworthy $1.7 billion, the data underscores the institution’s ability to attract quality mortgage applications and drive volume, even as certain discharges tempered the overall growth in the home loan portfolio. This performance illustrates a blend of disciplined risk management and a growing appetite for credit in the current economic setting.
Moreover, the lender observed stabilization in late-stage delinquencies, which suggests that existing borrowers are managing their repayments effectively under stable rate conditions. This improvement is especially significant given the ongoing adjustments in funding costs. The average cost of funding experienced a rise to 4.38%, marking an increase of 35 basis points compared to the first half of the previous year. This change can be largely attributed to prior cash rate hikes by the Reserve Bank and the inherent volatility observed in the bank bill swap rate during the period.
Despite the slight contraction in the net interest margin—down by just 1 basis point to 2.46%—the underlying net profit saw a modest uplift, moving from $69.6 million to $71.4 million. This near-term profit increment, achieved in a challenging economic climate, highlights the lender’s operational resilience and effective management strategies. Additionally, the interim dividend was maintained at 12 cents per share, reinforcing the company’s commitment to returning value to its investors.
The stock market reaction was positive, with Liberty Financial Group’s shares appreciating by 1.3% in the first hour of trading, reaching a price of $3.87. Trading at a market capitalization nearing $1.2 billion, the performance signals investor confidence in the company’s steady operational execution and future prospects. Overall, the latest figures from Liberty Financial Group underscore a well-balanced approach to growth and risk, amid an economic environment marked by cautious optimism and evolving market dynamics.
