AFG reports strong interim results
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Australian Finance Group has reported a 20 per cent rise in first-half net profit to $17.7 million, sending its shares 10 per cent higher at the market close today.
AFG said its first-half performance was driven by strong growth in its securities division, which recorded $690 million in settlements, up by 46 per cent on the first half of FY19, and a $2.5 billion loan book (up 51 per cent).
Its business settlements stood at $192 million, up 242 per cent.
Meanwhile, the group recorded $16.9 billion in residential settlements, compared with $17.2 billion a year earlier.
Its combined residential and commercial loan book stands at $160 billion, up from $151.8 billion.
AFG chief executive David Bailey said the first-half results demonstrated the group’s diversified nature.
“After a subdued start to the year in residential settlements, AFG Home Loans, AFG Business and AFG Commercial are delivering growth and building on the momentum generated by the implementation of our diversification strategy,” he said.
“This makes AFG a more sustainable business.”
He said the shift towards AFG Securities was becoming a significant contributor to the group’s earnings.
AFG recorded a debt-free balance sheet for the first half of FY20, citing it had the flexibility to consider future investment opportunities as they arise.
In August last year, AFG announced its plans to merge with mortgage aggregator Connective, which is headquartered in Melbourne and has an office in West Perth.
The Australian Competition and Consumer Commission (ACCC) recently raised preliminary competition concerns over the deal, valued at $120 million.
The combined group will account for nearly 40 per cent of all mortgage brokers operating in Australia.
"We remain confident the proposed merger is pro-competitive and that preliminary matters raised by the ACCC can be addressed," Mr Bailey said today.
A final decision on the proposed merger is anticipated for after the second-half of FY20.
Shares in AFG closed up 10.55 per cent to trade at $3.04.