Australian Finance Group Ltd. · ASX:AFG
Australian Finance — 2019 Morgans Conference
23 slides from Australian Finance's conference presentation, Oct 9, 2019
Slide 1: 2019 Morgans Conference
For personal use only 2019 Morgans Conference
Slide 2: AFG Overview
AFG Overview For personal use only • AFG commenced business in 1994 • One of Australia’s largest mortgage broking groups, and one of the country’s leaders in the provision of lending solutions • Listed on the ASX in May 2015 • Market capitalisation of approximately $475m • Generated ongoing growth i
Slide 3: FY19 results – Highlights
MORGANS CONFERENCE 2019 FY19 results – Highlights For personal use only 3
Slide 4: Executing on AFG's earnings diversification strategy
MORGANS CONFERENCE 2019 Executing on AFG’s earnings diversification strategy For personal use only The Connective transaction is consistent with our long-term strategy, significantly grows the distribution network and allows AFG to increase the penetration of products such as AFG Securities, white l
Slide 5: Strategic & market outlook
MORGANS CONFERENCE 2019 Strategic & market outlook For personal use only Well positioned for future growth opportunities Market outlook Underlying market dynamics continue to be supportive of the Capital light, strong balance sheet with no debt broker proposition • RBA implemented two interest rate
Slide 6: AFG, AFGHL & AFGS
2019 AFG, AFGHL & AFGS For personal use only $2.06BN $147.42BN $9.20BN $7.14BN 6
Slide 7: AFG Home Loans
MORGANS CONFERENCE 2019 AFG Home Loans For personal use only • AFG Home Loans’ book continued strong growth, up 25% to $9.2 billion Funded directly by AFG • Changing mix towards AFG funded Retro and Link, with white label lender appetites consistent with the overall market • Changing mix impacts ear
Slide 8: AFG Securities
AFG Securities • AFG Securities is providing choice to customers in a For personal use only complex market, including the near prime sector through the higher margin Link product • AFG Home Loans Link launched in 2018, with Lodgments of $345 million and Settlements of $171 million in FY19, up from $
Slide 9: AFG Securities – Operational
AFG Securities – For personal use only Operational • Strong growth achieved whilst maintaining the quality of the book • Half of the overall book has an LVR <70%, with all loans greater than 80% covered by LMI • At June 2019 there were only 13 loans in arrears greater than 30 days, demonstrating a m
Slide 10: AFG Commercial powered by Thinktank
2019 AFG Commercial For personal use only powered by Thinktank • Settlements have increased to $89 million from $46 million in FY18 • Number of Brokers lodging AFG Commercial deals has grown from 50 in FY18 to 186 in FY19 • The Thinktank equity interest delivered earnings of $1.5 million in FY19. Th
Slide 11: AFG Business
2019 AFG Business For personal use only 22 lenders on the panel across • Settlements across the platform increased Mortgages and Asset Finance from $12 million in FY18 to $130 million in FY19. Lodgements in Q1 FY20 were over $140 million • Expanding the panel delivers further choice and a wider prod
Slide 12: For personal use only
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Slide 13: Q1 FY20 trading
Q1 FY20 trading For personal use only • Total residential lodgements $15.7 billion, up 11% on Q1 FY19 • Although AFG Home Loans lodgements were down 7%, AFG Securities lodgements were up 38% • Residential lodgement growth evident across all states 13
Slide 14: Lending volumes
MORGANS CONFERENCE 2019 Lending volumes For personal use only • Total lodgements increased 11% in Q1 FY20 v Q1 FY19 following regulatory changes, interest rate cuts and the Federal election • NSW, VIC and QLD particularly driving the national increase 14
Slide 15: Average loan size and LVR
MORGANS CONFERENCE 2019 Average loan size and LVR For personal use only • Average loan size increased to over $530k in Q1 FY20 • National LVR increased in Q1 back in line with FY15 levels 15
Slide 16: Lender market share
2019 Lender market share For personal use only • Non-major split of Q1 FY20 lodgements increased to 46%, continuing to provide choice and compitition. • Non-major banks predominately driving the increase in flows to non-majors 16
Slide 17: Types of lodgements
2019 Types of lodgements For personal use only • Slight increase in percentage of refinance volumes and upgraders both recovering from their previous recent decrease • First home buyer percentage of volumes continuing to increase – back in line with FY14 levels 17
Slide 18: First home buyers and Refinancing
MORGANS CONFERENCE 2019 First home buyers and Refinancing For personal use only • Volumes of first home buyers and refinancing loans both increased through Q1 FY20 • Non-major split of refinancing volumes increased to over 50% in Q1 FY20 while for First home buyers, this split is significantly lower
Slide 19: Investor loans
MORGANS CONFERENCE 2019 Investor loans For personal use only • Investor loans continue to be at lower split of volumes below 30% 19
Slide 20: AFG Securities
MORGANS CONFERENCE 2019 AFG Securities For personal use only 20
Slide 21: In conclusion
MORGANS CONFERENCE 2019 In conclusion For personal use only Overall activity in the industry has shown increase in Q1 FY20 post election, regulatory changes and interest rate cuts Non-major split continues to increase demonstrating increased competition and choice in the market Investment loans cont
Slide 22: Q&A
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Slide 23: Important disclaimer
MORGANS CONFERENCE 2019 Important disclaimer For personal use only This presentation contains general information which is current as at 8 October 2019. The information is intended to be a summary of Australian Finance Group Limited (AFG) and it its activities as at 30 June 2019, and does not purpor