Residential portfolio dips, but diverse portfolio mix saves the day
Liberty Financial Group pared back its residential loan portfolio in the first half of its 2026 financial year, as discharges and amortisation outpaced the rate of new originations.
On a year-on-year basis, the ASX-listed non-bank lender’s residential loan portfolio dipped around 4% – from $7.95 billion to $7.6 billion. Residential originations concurrently surged by nearly 9% – from $1.7 billion to $1.85 billion.
However, Liberty’s group-wide portfolio remained stable at around $14.8 billion, thanks to a record year for SME finance and SMSF lending.
The group’s ‘secured’ portfolio, which combines SME, SMSF and auto finance, surged by 4.7% to $6.1 billion. Originations soared over 15%.
Liberty remained highly profitable in the year, with a net interest margin (NIM) of 2.47% comfortably outpacing industry-wide averages. Liberty attributed this to effective cost management.
Statutory net profit after tax (NPAT) increased by more than 16% to $76.4 million.
“We’ve done this by maintaining our strong operating disciplines as reflected in our stable portfolio, industry leading NIM and cost-to-income ratios in a highly competitive and challenging market,” said chief financial officer James Boyle (pictured).
“Our continued focus on service delivery and differentiated customer solutions means there are real alternatives for customers needing finance which is unable to be offered by traditional lenders,” he added.
Chief financial officer Peter Riedel said Liberty’s capital and liquidity position “remains in a strong position to support customer growth”.
He highlighted the $5 billion in new funding raised throughout the year while retaining an investment-grade bond rating.
“Our market leading net interest margin of 2.47% and cash return on equity of 13.8% are a further demonstration of LFG’s focus on building durable business value for securityholders”, said Riedel.
Boyle added: “We’re happy to see better portfolio quality reflecting the relative improvement in economic conditions over the last year. We recognise that recent interest rate increases and economic challenges remain, and we will continue to focus on providing our customers with differentiated products and good support as needed.”
