AFG residential sales reach $34bn

Mortgage lender Australian Finance Group has posted an underlying profit of $36.3 million for the full financial year on the back of rising residential settlements.

AFG, which is set to merge with Melbourne-headquartered Connective, said residential sales rose 9 per cent in the 12 months to June 30, recording $34.1 billion and contributing to a 27 per cent rise in its underlying net profit.

AFG chief executive David Bailey said the group had experienced growth in every state.

“As we head into the new financial year, the residential business is well placed to reap the initial financial benefit of this increased lodgement activity, however uncertainty remains around the broader impact on the Australian economy for the balance of the new financial year,” he said.

Commercial settlements dropped marginally to $2.3 billion for FY20, while settlements under the AFG Business platform surged 167 per cent to $346 million.

There were 29 lenders on the platform, Mr Bailey said, including all four major banks.

AFG has declared a final, fully franked dividend of 4.7 cents per share, to be paid next month.

The West Perth-based group recently received approval from Australia's competition regulator to purchase fellow mortgage aggregator Connective under a cash and scrip deal that today would be worth around $117 million – with AFG’s share price closing 3.8 per cent lower to $1.85.

The merger is subject to court approval, with the companies awaiting a decision.