FirstMac posts strong profits for 2011 financial year

Queensland-based mortgage lender FirstMac has revealed strong profit figures for the 2011 financial year with both operating profit before tax and net profit after tax well above five-year average figures. 

The company reported operating profit before tax of $15.7 million and net profit after tax for the year of $9.5 million, compared with five-year averages of $10.9 million per annum and $6.0 million per annum respectively. 

Loans and advances for 2011 fell marginally from the previous year to $4.4 billion, representing a 2% decrease, with new loan originations broadly equivalent to the level of discharges. 

The lender forecasts loans and advances to increase over the course of 2011-12 as a result of increasing origination levels and following the launch of its online direct retail model branded Loans.com.au. This new distribution channel commenced in March 2011, with increasing settlement volumes experienced from June 2011. 

FirstMac noted that while the average cost of funding across its mortgage portfolio increased over the 2011 financial year, residential mortgage assets have re-priced in line with major bank margin increases, benefiting the group’s net interest margin. 

FirstMac managing director Kim Cannon says the group has maintained its distribution network since the start of the GFC and continues to originate new mortgages. 

“FirstMac provides the proof that it is possible to offer home loan products with competitive interest rates and also maintain a healthy net interest margin. If we can do this, it is possible for all lenders to do.” 

FirstMac was one of the few non-bank lenders able to continue lending during the GFC and has successfully participated in the Australian government’s mortgage securitisation program, raising $1.4 billion from the scheme. 

In 2002 FirstMac entered the securitisation market and began self-funding its own loan business, by issuing bonds on global capital markets. Since 2003, FirstMac has publicly issued over $9 billion of residential mortgage-backed securities.