22/02/2019 - 13:58

AFG posts 2.2% profit jump

22/02/2019 - 13:58

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Australian Finance Group has announced a cash profit increase, and said there were encouraging signs for the future of the mortgage broking industry.

AFG posts 2.2% profit jump
David Bailey says customers trust mortgage brokers.

Australian Finance Group has announced a cash profit increase, and said there were encouraging signs for the future of the mortgage broking industry.

AFG’s cash profit for the first half of the financial year rose by 2.2 per cent, compared to the previous corresponding period, to $14.1 million.

Its home loans business grew, with settlements up 6 per cent to $1.73 billion.

Residential settlements were down 7 per cent on the first half of the 2018 financial year, to $17.2 billion.

In a statement, the company said tightening credit conditions caused the fall.

Its residential trail book was up 8 per cent to $143.9 billion.

The board declared an interim dividend of 4.7 cents per share, which was the same as last year.

Earlier this month, AFG’s share price fell to an all-time low of 84 cents, after the final report from the Hayne Royal Commission recommended a ban on trailing commissions for loans from July 1 2020.

The report went on to state that upfront fees for mortgage brokers should then be phased out.

The company said the outlook for the industry has become less gloomy since the report was released.

“There have been encouraging signs that the government and regulators recognise the value brokers deliver in lowering borrowing costs and broadening choice for consumers,” AFG said.

“As a result, both the government and Labor opposition have highlighted that any change to the broker industry must be introduced in a timely and considered manner.

“This is significant recognition for the sector.”

AFG managing director David Bailey said customers trusted mortgage brokers, as the sector is at an all-time high.

“This should remain front and centre in the minds of policymakers,” he said.

Today, shadow treasurer Chris Bowen said mortgage brokers would get flat commissions under a Labor government.

He said the policy would address the issues outlined in the  royal commission without crippling the mortgage broking industry.

The changes have been welcomed by many in the industry, including Mortgage Choice chief executive Susan Mitchell.

AFG is yet to comment on Mr Bowen's announcement.  

AFG shares were up 5.93 per cent to sit at $1.25 each at the close of trade.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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