Double-digit dividends reward investors amid tighter trans-Tasman credit
Resimac Group, which is running down its New Zealand mortgage book but still counts many Kiwi shareholders, has posted a strong first-half result to 31 December, powered by fatter lending margins and its acquisition of Westpac’s Australian auto loans.
Net interest income climbed 26% to A$99.6 million, driven largely by the purchase of Westpac Banking Corporation’s auto loan “back book” and a cheaper cost of funds, with the BBSW spread sitting below Reserve Bank of Australia cash rates.
Operating expenses rose 24% to A$53.5 million as the lender absorbed around 100,000 new auto customers and ramped up professional and staffing costs to service the expanded portfolio.
Settlements and AUM grow as home loans outperform
Total settlements reached A$3.1 billion, up 11% on the prior corresponding period, reflecting deeper broker relationships and quicker credit processing. The ASX-listed group’s assets under management rose to A$15.8 billion as of 31 December, including A$13.7 billion in home loans, up 1% since June, and A$2.1 billion in asset finance, down 16% as the Westpac auto book continues to run off.
Profitability metrics all moved in the right direction. Operating profit before impairment and tax increased 44% to A$51.7 million, normalised NPAT almost doubled to A$29.6 million, and statutory NPAT jumped 111% to A$28.5 million. Group net interest margin expanded 15 basis points to 163bps, while the cost-to-income ratio improved to 50%, supported by investment in “people, technology, and process”.
Commenting on the result, chief executive Pete Lirantzis (pictured) said: “I am pleased to report a 44% increase in operating profit this half. This result shows pleasing momentum across the business and reflects the progress we are making on our strategic priorities. We are benefiting from more positive lending markets, a focus on disciplined asset quality, and the continuing support we are showing to our broker and customer base.”
Big fully franked dividends draw trans-Tasman attention
The board declared a fully franked interim dividend of 4 cents per share and a fully franked special dividend of 9 cents per share, both in Australian dollars and payable on 24 March. The combined 13 cents per share payout, totalling A$51.4 million, may appeal to New Zealand investors seeking income from ASX-listed financials.
Looking ahead, Lirantzis said: “By focusing on our core mortgage business, investing in the broker, and customer experience and optimising the asset finance portfolio, we are positioning the group for long-term, sustainable growth.”
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