Resimac Group has announced its FY24 trading update, reporting total settlements of $5.1 billion, up from $4.2bn in FY23.
Home loan settlements reached $4.3 billion, while asset finance saw a substantial increase to $0.8 billion, compared to $0.5 billion the previous year.
“This growth highlights the strength of our diversified product offering,” said Resimac’s Susan Hansen, interim CEO, and James Spurway, chief financial officer.
Assets under management (AUM) closed at $14bn as of June 30, with home loans accounting for $12.9bn and asset finance reaching $1.1bn. This represents a modest increase from FY23’s $13.8 billion.
However, Resimac experienced a 13% drop in average home loans AUM due to fierce competition, particularly in the early part of FY24.
“Major lenders continued to offer cashback incentives, impacting our growth,” Hansen and Spurway said in an ASX release.
Despite challenges in home loans, the AUM for Resimac’s asset finance division grew steadily, supported by a strong collections and recovery process.
“Following the end of the Reserve Bank’s term funding facility, we expect further momentum in AUM growth through FY25,” Hansen and Spurway said, indicating optimism for the coming year.
Resimac reported low levels of arrears and hardship across all product segments, reflecting the solid credit quality of their book.
However, provisions for doubtful debts increased in FY24, with collective coverage for asset finance rising to 84bps, from 42bps in FY23. This aligns with loss expectations and seasoning of the portfolio.
Resimac expects its unaudited FY24 normalised NPAT (excluding fair value movements on derivatives) to be between $42 million and $44m, driven by a reduction in home loans AUM and compression of net interest margins.
“This outcome is within our expectations given the competitive landscape,” Hansen and Spurway said.
“Provisions for doubtful debts increased in FY24...to align with loss expectations and the seasoning of the portfolio.”
While FY24 presented headwinds from competition, Resimac remains optimistic about future growth in its asset finance division and expects continued improvement in its home loan portfolio as competitive pressures ease.
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