Resimac nets record performance
Resimac’s 2021 results show record net profit after tax as well as strong growth in assets under management and mortgage settlements in Australia and New Zealand. Resimac says it is reaping the reward of the investments it has made in its distribution platforms and is seeking further growth through new brands and lines of business.
Despite a tumultuous economic backdrop, Resimac saw strong growth in its core mortgage portfolios in Australia and New Zealand during financial-year 2021. This performance was based on an 81 per cent year-on-year increase in New Zealand mortgage settlements and a 15 per cent increase in settlements from the homeloans.com.au brand.
Resimac’s 2020 experience matched that of many Australasian nonbanks: an initial rush of requests from borrowers for hardship arrangements, followed by a quick snap back to normality and a rapid return to origination growth. Overall, Resimac’s home-loan assets under management grew by 11 per cent over the year, more than double system growth.
Andrew Marsden, general manager, treasury and securitisation at Resimac in Sydney, says the nonbank is realising the benefits of investments in its distribution platforms and its suite of mortgage products.
“With the relative strength of our funding and capital platform, we have been able to pursue measured growth strategies. As we continue to deploy technology across our business, we expect the Resimac operating model will have more cost and scale efficiencies.”
Resimac’s homeloans.com.au brand – launched in 2020 – is key. Marsden says the direct channel has been embraced by online customers over the last year and that it will be an ongoing contributor to Resimac’s prime-mortgage origination.
“We continue to see opportunities in the prime and nonconforming mortgage markets. With the relative strength of our funding and capital platform, we have been able to pursue measured growth strategies.
As we continue to deploy technology across our business, we expect the Resimac operating model will have more cost and scale efficiencies to enable reasonable gains in market share,” Marsden comments.
The overall business results are matched by Resimac’s presence in the public residential mortgage-backed securities (RMBS) market over FY21, in which it issued company record volume from its Premier, Bastille and Versailles programmes.
Resimac has also begun its FY22 funding in earnest, printing a A$1 billion (US$741.5 million) deal from its Premier programme in August and a NZ$300 million (US$213.7 million) Prime Trust deal in September.
The Premier transaction included a senior pricing record for an Australian nonbank issuer at 68 basis points over one-month bank bills. Pricing in Resimac’s Bastille and New Zealand RMBS programmes is also materially lower at the beginning of the new financial year than at any point since the financial crisis, according to KangaNews data.
Marsden says: “Our funding programme is core to assetsunder-management outcomes and we would not consider pursuing growth opportunities without having funding and capital capacity. Resimac has always had an overriding focus on the liability side of the balance sheet, and this will continue.”
He adds that, in 2022, Resimac aims to bring transactions denominated in Australian, New Zealand and US dollars, and yen.
Resimac is also expanding its focus beyond residential mortgages. Early in 2021, Resimac fully acquired nonbank consumer and commercial lender IA Group to bolster its asset-finance offering.
IA Group has been rebranded Resimac Asset Finance and Marsden says work is underway to enhance the origination and servicing platform so it can offer a suite of competitive consumer and SME products.
Resimac Asset Finance has already launched a broker channel and a new, online, direct-to-consumer channel. Resimac has also restructured its warehouse facility to reduce cost of funds for its asset-finance business. Ultimately, Resimac is aiming to bring the product to the public, term asset-backed securities (ABS) market.
“We are excited about our new venture in the asset-financing market. With a similar liability-management approach to that of our mortgage business, the Resimac Asset Finance business will originate and service collateral with risk and volume profiles conducive to an ABS shelf. We look forward to being able to offer our investors a complementary product to our RMBS deals,” Marsden comments.
nonbank Yearbook 2021
KangaNews's sixth annual guide to the business and funding trends in Australia's nonbank financial-institution sector.