Australian Finance Group (ASX:AFG) has today priced its AFG 2017-1 Trust Residential Mortgage Backed Securities (RMBS) issue.
AFG Chief Executive Officer David Bailey said this latest transaction is the largest term deal AFG has undertaken.
The securitisation program is an important contributor to the company’s overall growth strategy. We are delighted to see the success of this issue further validate the AFG Securities business model.
A very positive aspect of this transaction was the increase in the number of returning investors, as well as the increased number of new investors to our programme.
Mr Bailey said the success of the transaction reinforces the importance of the securitisation sector to the Australian lending market. “A vibrant and strong RMBS market is vital to ensure a greater level of competition and choice in the Australian mortgage market.
“By being able to source competitively priced funding from a variety of investors we can, in turn, provide competitively priced products to Australian consumers.
He noted the success of today’s issue reflects the confidence of investors in the high-quality lending standards that AFG Securities apply. “The performance of our portfolio continues to be very strong and investors are recognising the unique position AFG holds in the residential mortgage market. These standards have underpinned the success of our latest transaction.
“As I have said before, the performance of every mortgage starts and ends with the credit policies and appetite of the lender. Our AFG Securities programme has robust underwriting and risk protocols and this is reflected in the performance of our book.
The transaction will settle on 7th September 2017.
Prior transactions include a $300m RMBS issuance in 2016, a $300 million issue in 2014 and a further two issues in 2013 of $245m and $300m.
The AFG 2017-1 Trust RMBS was successfully arranged by Australia and New Zealand Banking Group Limited (ANZ). Joint Lead Managers were National Australia Bank Limited and ANZ.
Detail relating to the A$350m AFG 2017-1 Trust RMBS transaction is as follows:
As Australia’s largest mortgage broker event ever held, the impact of the event extends beyond just the two days. We aim to help our AFG members become some of the best educated in Australia with new training modules to help future proof your business being released frequently.
What training we have coming up
Our first training modules will focus on areas including Social Media, Risk, Information Security, Digital, and Marketing – which we believe are going to inform and arm you with the right tools you need.
Get started with your first course
Click on the video to take a look at the first in the series, Introduction to Social Media.
There’s nothing we love more than hearing about our brokers’ success in achieving great outcomes for their clients. Last week we recognised the efforts of our Western Australian brokers at our 2017 State Awards event. Are you looking for a broker in your local area? We can help.
Congratulations to all the nominees and winners below:
Last week celebrated the success of our WA AFG brokers at our 2017 State Awards event.
These awards are a time to recognise and reward those WA members who are leading the way and who, despite tough conditions, have achieved success and great consumer outcomes this past financial year. We would also like to acknowledge and thank our lender partners and their own team efforts, in helping our members achieve their results.
We are proud of all our nominees’ outstanding accomplishments. We strongly encourage you to continue striving for excellence in all that you do.
Congratulations to all the nominees and winners below:
Analytics?is AFG’s interactive reporting tool for our brokers on SMART where they can access data on deals lodged and settled, commission payments, portfolio growth, customer statistics, and key indicators which let you know about the health and growth of your business.
A reporting tool that’s just like having your own Business Analyst on staff.
Some of the features you can take advantage of in Analytics include:
Access to AFG Mortgage Index reports
Reporting on lodgement pipeline
Top lodging loan writers
Portfolio value detailed report
SMART send information
Marketability tab to segment your audience
Analytics extracts and analyses all of the data from your FLEX applications, contacts, and commissions on a daily basis, updating every evening so you have the latest data.
With clever reporting on your business patterns and customer statistics, you’re able to develop better forecasting to leverage positive trends and counteract any negative patterns before they impact your bottom line.
Learn has many training opportunities for you to learn about Business Intelligence and how to apply it to your business operations. Once you’ve integrated the instant data analysis that Analytics can provide into your business, you won’t know how you lived without it.
Are you reviewing your lodgement pipeline to enable better business forecasting?
Are you using the tool to better target your customers – going into the customer tab and looking at those with a low LVR to have focused conversations on their options from here?
Are you clicking on the commissions’ tab to review your upfront and trail to better identify any potential discharge trends to then apply to your wider retention initiatives?
Are you using it to identify which SMART campaigns you’re currently on and reviewing the feedback you’re receiving to ensure your customer service is as top notch as it can be?
Are you scrutinising the marketability of your contacts to see which email addresses you’re missing in FLEX and who you need to get in contact with?
Are you customising the right reports to best suit your business? This is one of the most powerful features of the tool that has the potential to lift efficiencies. If you need to know more on the most popular reports our brokers run and which could be of most value to you, talk to your BDM or RM today.
Australian Finance Group (ASX: AFG) today reports a net profit after tax (NPAT) of $30.2 million for the 2017 financial year (FY2017). This excludes the impact of the recognition of AFG Home Loans (AFGHL) white label settlements relating to prior years (normalised NPAT). This is slightly ahead of the result forecast in our profit upgrade on 19 June 2017, and an increase of 33% on FY2016.
AFG Chief Executive Officer David Bailey said the strong result has been driven by AFG’s core business of residential mortgages, commercial lending, and the continued strong growth in the own-branded AFGHL business.
“Today’s results are a testament to AFG’s strategy of continuing to focus on our core business and growth through earnings diversification. We are very pleased with our progression down this path.”
These results have been achieved in an environment of flat credit growth and significant regulatory changes impacting foreign investment and credit appetites of Australia’s lenders.”
Reported NPAT of $39.1 million, normalised NPAT of $30.2 million
White label AFG Home Loans settlements of $2.7 billion
Combined residential and commercial loan book of $133 billion, growth of 11% over FY2016
Residential settlements of $34.3 billion
Commercial settlements of $2.8 billion
Final dividend 5.5 cents per share
Earnings Per Share (EPS) for FY2017 is 14 cents per share based on normalised NPAT
ROE of 31%
The AFGHL business finished the full year 2017 with settlements of $2.7 billion. This result represents a 38% increase on FY2016 and evidences the success of our ongoing strategy to deliver competitive choice to Australian borrowers. The AFGHL loan book is now $5.5 billion, an increase of 44% from $3.8 billion in FY2016.
Overall, the company has a residential loan book of $126 billion that will generate ongoing trail commission. The AFG Home Loans securitised book has seen a 10% increase in settlements for FY2017 to finish the financial year at $1.15 billion, whilst maintaining a strong net interest margin.
Mr Bailey noted the company has achieved another strong year in the recruitment of brokers. From 2,650 active brokers in FY2016, numbers have increased by 8.5% to 2,875.
“In a clear sign of the health of the commercial lending market AFG Commercial asset financing settlements rose 20% to finish the year at $445 million,” he said.
“AFG Commercial mortgage settlements for the year were $2.84 billion, which represents just 0.7% of the overall $410 billion commercial lending market in Australia. The potential for growth is tangible.”
The small to medium enterprise (SME) segment of the market in particular is also one where AFG is optimistic. AFG is poised to harness this growth with the impending rollout of an Australian-first SME lending platform. The new platform, AFG Business, will enable our network of brokers to provide small business borrowers access to a broad range of options and deliver faster access to capital.”
The complexity of the Australian lending market has increased significantly in the past 12 months. “AFG began its listed life with around 1,450 products on its lending platform,” explained Mr Bailey. “That number has now increased to more than 3,400 at FY2107.
“The growth is a reflection of multiple changes by lenders to their Australian product suites. The introduction of new products, changes to LVR bands, numerous product splits with differing rates, repayment options according to loan type, and significant changes to investor and owner occupier pricing have been rolled out across our platform in the past 12 months. These ongoing changes have been delivered at an unprecedented pace and reaffirms the importance to a consumer of having an informed broker.
With more than 10,000 customers seeking the assistance of an AFG broker every month, the value consumers place on the mortgage broking channel continues to be clear. “The mortgage broking channel accounts for 53% of the Australian lending market and more than 20% of those mortgage brokers work with AFG,” said Mr Bailey.
2017 has also been marked by significant regulatory scrutiny of the Australian lending market. “AFG has been at the forefront of consultation with industry, government and regulators. The message we have had for all stakeholders has been clear – AFG has 45 lenders on its panel with more than 35% of borrowings going to lenders other than the four major banks, and we remain committed to ensuring choice and competition remains for Australian consumers.
“This competitive tension ensures consumers continue to have choice and most importantly benefit in terms of home loan price and service because of what brokers deliver on a daily basis across the Australian lending market,” he concluded.
There is no doubt that information technology is our backbone and forms the strategic foundations of all we do. We have a loan book of over $133B and we process the loans for over 10,000 customers a month working with over 45 of Australia’s leading banks and lenders every day. To do this, and to attract the quality of business we do, we ensure we lead the charge when it comes to our technology. We invest in the best people, platforms, systems and tools in order to remain an innovative leader of high quality, resilient and agile technologies to fuel business growth.
Our technology is one of our key business differentiators and one of the key reasons behind our stellar success over the past 23 years. We invest heavily in our technology, we’ve invested over $70 million in technology tools and initiatives since we began. We empower our people with the best tools, the best platforms and importantly, we empower our people with autonomy and the licence to dream big and look as far afield as possible when building business solutions. AFG is ‘all-in’ cloud, embracing the latest technologies and platforms, pride ourselves in our innovation and make considerable effort to recognise and embrace staff-generated ideas.
Being an industry leader means a lot of what we do has never been done before. Each new project presents its own challenges and we pride ourselves on a 30 strong team of developers and experts who excel at creating solutions for those challenges. We are looking for a new CIO to lead us in meeting these challenges and sharing the benefits of working in one of the country’s leading financial services providers.
On a daily basis our IT teams work with every aspect of the business; solving problems, planning improvements, educating and evolving the business to ensure AFG continues to lead the industry. The tools we develop drive our own business and also the businesses of our members.
AFG is committed to our culture
We provide an inclusive workplace where all are welcomed and recognised for their unique ability, regardless of gender, race, religion, disability, orientation or another identity attribute.
We offer the same benefits and inclusions to all staff including but not limited to;
Access to flexible working hours and arrangements
Celebration of diversity events to encourage awareness and understanding
Observing each individual’s choice of privacy and discretion with regard to any attribute of their identity
Partnerships with institutions which enable us to continue our pipeline of diverse talent for employment
Each and every one of the 2,850 brokers under the AFG umbrella is different. You have different business models, and we expect you will use the tools available to you in different ways. That’s why, more and more, we are building flexible features into our solutions, helping you use the tools that work for you, in the way that works best.
We have a vast range of custom built solutions for our brokers, one item we’ve been developing changes for is our SMART website. Not only do all the integrations you’ve come to expect from us, continue to be updated and move with the diversification of our industry, but we’re continuously developing new ways for our websites to work for you.
You already know about the FLEX integrations, sending enquiries straight to your database, the over 20 embedded calculators, the constantly updated content and of course the huge amount of content we include for your social media, digital business presence and other marketing materials.
What you may not already know about:
The extra colour choices we are providing to better match your branding with your website — taking the selection up to 20.
Your expanded news article sharing abilities — enabling you to share individual articles from our entire history of online Haven editions, one article at a time, giving you a large library of social content.
You can add in even more custom content to various pages in the website.
Plus, our favourite, five brand new informative guides with your branding and contact details for customers to download from your website. If you’ve heard of the term ‘lead-magnet’ before, you will know how juicy and valuable these can be to a business.
Is your website or social media letting you down? When was the last time you updated your website content or posted an article to Facebook, allowing followers to send an enquiry straight to you?
Your digital presence is often more important than your physical presence. You think long and hard about your choice of clothing and how your office looks, have a think about how many people have the potential to see your website. Leaving a website untouched and unloved, means you run the risk of lower results on search engines and less engagement from those who do visit your site. We help take a load off by doing the updates for you.
If you’re managing your own website, there are a host of things to consider. A few that should be high on your priority list include:
Think about your target market and the words they would type into Google to find you. These are the words you should be using on your website to optimise your appearance in search results.
Ensure you have the functionality to update your website often. A dynamic website is a great way to show Google that you are paying attention to your website and your customers. Adding a short blog or article once a month is a great way to do this.
Do not make any claims that you cannot prove. If you don’t have proof that your rates are the ‘cheapest’ or your service is the ‘best’ then you cannot say it.
Visit Learn?to download our advertising guide. These rules apply to the promotion of any product or service by your business. Your website is required to meet the same standards.
If you are an AFG Credit Representative, it’s important that your website and all the wording contained in it are approved by the AFG Compliance team. You can contact us at firstname.lastname@example.org for more information.
Technology is a key strategic focus for us and the backbone of our business and the businesses of our 2,850+ brokers. AFG has invested over $70m in technology operations and development and we are continually enhancing this technical proposition. We invest in people, platforms, systems and tools to remain an innovative leader in the delivery of high quality, resilient and agile technologies to fuel business growth. Winning Technology Platform of the Year confirms our market-leading position and we look forward to sharing new technology with our brokers all over the country.
We believe that our efforts will go a long way in securing the longevity and helping fuel the growth of our industry. This year, more than ever, we believe this is so as we’ve begun the push on behalf of all brokers, regardless of aggregator, to ensure their voices are heard and their futures are secure. Providing a voice for all brokers via the ASIC forum, a website built for consumers to share their support, regular meetings with regulators and politicians, information sessions open to brokers of any aggregator, the provision of data for the review and regular compliance changes to our systems to ensure our brokers are well ahead of regulatory changes or intervention. The confirmation of our status as Aggregator of the Year?fills us with pride and we look forward to doing more for the industry and continuing to support you and all our brokers to the best of our ability.
Thank you to all those who have contacted our staff with messages of support and congratulations, we reiterate that you and all our brokers are largely responsible for our success.
You might see a few familiar faces in The Adviser’s highlights video:
We don’t like to make blanket statements at AFG. Our industry works in facts, figures and codes. But the words being used to describe AFG’s National Broker Conference 2017 are worth sharing here and the 1,150 who attended will confirm them:
An industry first
The largest gathering ever of mortgage brokers in Australia
Insights from ASIC to help future proof your business
Networking opportunities to meet and learn from other successful brokers
The introduction of Australia’s first smart commercial lodgement portal, AFG Business
With so many people flying in from all over the country, the check-in time was a mix of brokers catching up, networking with lender partners, tired post-flight eyes heading straight for the coffee cart and plenty of exchanging of agendas for the afternoon.
Rob Carlton’s welcome to the conference was heard throughout the venue with our brokers always appreciative of Rob’s intricate knowledge of the industry and his ability to apply this to all aspects of his role as MC.
Thursday provided a smorgasbord of content for attendees, providing the chance to choose from eight different breakout sessions. Topics ranged from insights into Olympic competition with swimmer?Cate Campbell, motivation techniques from the World Champion surfer?Layne Beachley through to economic and business updates from lenders, and a change management session with TED speaker Marty Wilson.
All of the business breakout sessions were standing room only and the applause could be heard throughout the venue at the end of each session. These times also presented a great opportunity for brokers to speak to AFG’s Executive and Directors, with many taking advantage of the chance. Hearing the strategy for the business from our CEO is an opportunity that as any AFG staff member will tell you, is not to be missed.
Friday followed with a full day of conferencing content and, once again, the coffee cart was fuelling some energetic discussion, or in Jeff Kennett’s case – perhaps debate.
Highlights of Friday included:
David Bailey, AFG’s CEO
David Bailey took the audience through our plans for AFG’s future and helped our brokers get to know him better. Not only did we all learn that David’s 12-year-old batting average was abysmal, but we also heard about his passion for CX (customer experience) and advocacy for the broker channel.
David Bailey – really appreciate what this man is doing for our industry and us as brokers. – AFG broker
Keiran Evans, AFG’s General Manager – Commercial
Keiran Evans introduced the conference to AFG Business, the Australian first in smarter commercial lodgements. Keiran’s knowledge of the commercial space is an asset to all AFG brokers and his contribution to AFG Business is helping us to shape the future of this diversification initiative.
AFG Business looks like a game changer, cannot wait until this is rolled out. Will help my business a lot! – AFG broker
Peter Kell, ASIC’s Deputy Chair
Peter Kell explained topics currently under the ASIC spotlight in human speak. Peter won the crowd over with his personable presentation and the feedback from our brokers was overwhelmingly appreciative. Peter also put forward suggestions for our brokers on how they can work towards positive consumer outcomes and protect their business, encouraging them to “prove how you deliver great outcomes for your customers.”
Brokers can help to match the needs of a consumer with the right product and lender. – Peter Kell on the function and benefits of mortgage brokers.
Hon. Jeff Kennett AC, former Premier of Victoria and founding Chairman of beyondblue
The Hon. Jeff Kennett AC charged the stage and had the audience in awe through his entire presentation. Jeff helped the room to understand how to prepare themselves and their staff for change. His time on stage finished with questions from the audience with his honest and frank answers resulting in the room erupting in laughter. Jeff challenged the perceptions and predetermined attitudes to change of the audience, reminding them that resilience takes training and preparation. Jeff’s positive influence on the management of AFG resulted in a new AFG initiative launched on the same day, Healthy State of Mind.
When properly structured and conditioned, we will all get through change. Preparation is key in challenging times. – The Hon. Jeff Kennett AC on how business professionals can get themselves and their staff through change.
Andre Eikmeier, Entrepreneur, Co-Founder and Joint CEO of Vinomofo
In his laconic, laidback manner, Andre Eikmeier shared with us the failures, triumphs and learnings that have shaped his disruptive wine business into one of Australia’s fastest-growing start-up success stories. The audience enjoyed listening to his personal story of resilience and never giving up, attributes that we can all apply to our every day.
Andre’s story showed how persistence and self-belief can really pay off. – AFG broker
Dr Catriona Wallace, Founder and CEO of FinTech company Flamingo
Catriona Wallace is a customer experience futurist, and she took the audience on a ride into the future, as she ran us through how customer experience technology may change the face of the finance industry. With predictions that by 2022, 30% of customer interactions in financial services will be conducted by machines, Catriona made us think about how our industry could be impacted.
Having an interest in technology and its role in the workplace, I found Dr Wallace’s presentation fascinating. – AFG broker.
At the Conference evening functions, the attendees placed the formalities of the daytime business sessions aside for a few hours of reward and recognition, and to do what many considered was one of the most valuable aspects of the Conference – networking and the opportunity it provided to share ideas, learn new things and get a better understanding of how fellow brokers operate their business.
The social gatherings were invaluable for networking. New relationships were forged and many ideas were shared. – AFG broker.
On the final night, the inaugural National Broker Conference culminated in the presentation of the following awards to our high achieving brokers throughout the country:
It was certainly an excellent two days packed full of content and the huge amount of positive response we have received is overwhelming. Our events team are reviewing all of the feedback provided by athe attendees to ensure that the next AFG National Broker Conference continues to meet the needs of our members.
There were mixed feelings at breakfast on the final morning with many lamenting the end of the Conference they’d enjoyed so much.
When large groups of our brokers gather, the comradery, spirit and supportive discussions are unrivalled in their ability to help businesses grow. The passion of our brokers continues to amaze us, their thirst for great outcomes for their customers and their advocacy for the industry is impressive.
We look forward to sharing the details of 2018’s AFG National Broker Conference with you in the future. See you there!