AFG 2018 Victorian Annual Awards

The 2018 Victorian annual awards function held on the 23rd of August was a great success.

We would like to take this opportunity to congratulate all of our award finalists and ultimate winners in each category for the 2018 year. Looking back it has been an amazing year for us all, plenty of changes in a vibrant industry that continues to grow and provide opportunities for all our brokers of all sizes.


The 2018 winners are:


Broker Group of the Year
Loan Gallery

Broker Group of the Year – Runner Up

Broker Group of the Year – Second Runner Up
National Pacific Finance

Broker of the Year
Larry Zhou
Link Capital Finance

Broker of the Year – Runner Up
Jasmeet Singh
Australian Loan Xperts

Broker of the Year – Second Runner Up
Alex Sobolevsky
Link Mortgage Services

Broker of the Year – AFG Business
Carmel Mannella
QMM Finance

Broker of the Year – Compliance (Credit Representative)
Debbie Kennedy
The Mortgage Forum

Broker of the Year – AFG Home Loans
Chris Akyildiz
Orange Home Loans

Broker of the Year – Commercial Finance
Larry Zhou
Link Capital Finance

Broker of the Year – Equipment Finance
Daniel Zadnik
Hawthorn Finance

Broker of the Year – Insurance
Michael Lee
Prestige Finance Services

Broker of the Year – Personal Loans
Mary Nebotakis
National Loan Solutions

SMART Broker of the Year – Customer Service
Adrian Feltham
Smart Mortgage Services

BDM of the Year – Residential
Anthony Wickremasinghe

BDM of the Year – Commercial
Nigel Anthony

Rising Star – Runner Up
Jade Fang
JKK Solutions

Rising Star Scholarship Winner
Prasath Sivagnanam
The Mortgage Corner

Broker Group of the Year – Sole Operator
Jasmeet Singh
Australian Loan Xperts

Broker Group of the Year – 1 – 3 Loan Writers
Hawthorn Finance

Broker Group of the Year- AFG Home Loans

Best Diversified Business
Mortgage Domayne

Best New Business
Doquile Perrett Meade Finance

Hall of Fame
Stephen Seddon
Sabre Financial Services

Hall of Fame
Thomas Thiele
Global Finance


AFG annual results FY2018

ASX: AFG has today announced its annual results for the 2018 financial year (FY2018). Strong organic growth has seen AFG deliver profit growth of 10.4% in FY2018.

The company reports an annual cash net profit of $33.3 million for the financial year ended 30 June 2018 and announces a final dividend of 5.7 cents per share fully franked, bringing total dividends for the year to 22.4 cents per share inclusive of the special dividend that was paid in March 2018. This represents a dividend yield of 15.9%.

AFG retains a strong balance sheet which remains debt free. In a relatively benign credit market, the growth in AFG’s profit is reflective of the strength of its distribution capability with residential settlements of $35.3 billion representing growth of 3%.

AFG CEO David Bailey said the company continues to successfully deliver earnings diversification through the core residential and commercial aggregation business and the higher margin AFG Home Loans business line.

“The earnings diversification strategy of AFGHL continues to deliver results for shareholders with settlements of $3.2 billion, up 20% on FY2017.

AFG’s strategic focus on the under-served SME market also saw the company acquire a significant stake in leading commercial SME lender Think Tank Group Pty Ltd (“Thinktank”) and continue to roll out its AFG Business platform.

“AFG continues to generate consistent growth in sustainable quality earnings despite challenging regulatory and economic conditions,” he said. “This would not be possible without AFG’s earnings diversification strategy, systemic importance to the Australian financial services industry, the certainty provided by a $145.4 billion loan book and distribution network of over 2,950 brokers across Australia.

Highlights include:

  • NPAT of $33.3 million, an increase of 10.4% on normalised FY17
  • AFG Home Loans settlements of $3.2 billion
  • Cash flows from operations of $32.5m
  • Combined residential and commercial loan book of $145.4 billion
  • Final dividend yield of 7.4% based on closing share price of $1.41 at 30 June 2018
  • Return on equity of 33%, up from 31% in FY2017.
  • 30.4% (fully diluted) investment in Think Tank Group Pty Ltd for $10.9 million

Company update

Since listing on the ASX the sector in which the Group operates has been confronted by a number of challenges, including: property price contractions, changes to foreign investor requirements, regulatory intervention, changing lender appetites, significant scrutiny by the regulators and market noise about potential impacts of all of this activity on the sector. “In this environment we have established a track record of financial performance underpinned by earnings growth and ongoing improvement in earnings quality. We are proud of the company’s performance and the results we are announcing today.”

Looking ahead

The past 18 months has seen a significant examination of the lending sector in Australia. “The findings of these inquiries should assist the government to promote a competitive and stable financial industry that contributes to Australia’s productivity,” said Mr Bailey. “We believe, and the Government recognises, that the mortgage broking sector provides vital competition to all Australians and it also an important contributor to the Australian economy in its own right.

“The regulatory reviews of the industry have already led to a level of tightening in credit which we expect will continue in the short term. An effectively functioning financial system requires an appropriate balance of regulation and self-regulation. We will continue to work closely with government, regulators and our industry partners to ensure momentum-based decisions do not drive unintended negative consequences for Australian borrowers.

“With competition and consumers at the core of our business AFG will continue to be a first-choice partner for lenders and broking groups. AFG has 50 lenders on its panel with more than 40% of residential borrowings going to lenders other than the four major banks, and AFG remains committed to ensuring choice and competition remains for all Australian consumers,” said Mr Bailey.

“The broker value proposition is strong, and broker introduced business now represents over 55% of the home lending market. Consumers are clearly comfortable with the channel.

“The industry will continue to evolve and as an agile business in the sector with access to broad distribution and funding and building blocks in place, the future will provide opportunities for AFG and I look forward to another successful year for the company,” he concluded.

Think local

While you’re getting your head around the macro, don’t lose sight of the micro. Median house prices can vary greatly from suburb to suburb. Here’s the local data house-hunters should have to help make an informed decision.

Price growth

While property is a long-term proposition, it’s worth comparing the last five years of price growth from suburb to suburb. If one suburb has moved beyond your reach, check out the performance of neighbouring postcodes. You might time it right to catch a suburb on the?rise.

Days on market

If most homes are selling in 30 days or fewer, the suburb is probably booming. Most homes in Australia take 30 to 120 days to sell, so if a suburb is moving most of its properties in 40 or fewer days, it’s worth closer?inspection.

Clearance rates

A clearance rate is the percentage of properties sold at auction over a week or a month. Interest rates, the time of year and competing events can all affect clearance rates. In major cities, a suburban clearance rate of 70 per cent or more is a positive indicator. A high auction rate can also be a sign that agents and sellers are confident demand in the suburb is?strong.

Rental yields

Look for steady rental yields. Rental yield is the median rental income over a year as a proportion of the median property value. Rental yields can remain high even in stagnant property markets, especially if there is little rental stock, so it is one factor to be considered with a range of?others.

Vacancy rates

The lower the vacancy rate, the higher the demand for rental properties, which is often a sign of market health. However, a glut of apartments might have no effect on house prices in the same suburb so be careful not to make assumptions on vacancy rates?alone.

Other factors

No single metric can sum up a suburb’s prospects. Beyond the data there are a range of other factors that can influence local property markets, including existing and planned transport and roads, the quality of local schools, restaurants and cafes and community spaces, such as?parks.

Do your homework, and once you have homed in on a suburb, talk to me to help you find a loan that is right for?you.

AFG brokers to be put through their paces

AFG has today announced a new program of education for its top performing brokers. Called AFG Academy, the program involves an intensive 3-day live-in course in Sydney next month, delivered by Harvard Business School Professor, David J Collis.

Commenting on the program, AFG CEO David Bailey said it provided a rare opportunity for attendees to gain insights from an expert in the field of strategy from a world-class institution such as Harvard, in Australia. “I was fortunate enough to attend a corporate strategy management course at Harvard in 2017. That experience took me out of my comfort zone and really made me think differently about the AFG business. In addition, the quality of the lectures was like nothing I had ever experienced before.”

“Recognizing it is not an opportunity our brokers would generally have the time to take up, AFG decided to bring some of that experience here and I am really proud to be able to offer the AFG Academy to a core group of our brokers,” he said.

“The course we will be rolling out here will be delivered by Professor Collis, an expert in corporate strategy from Harvard Business School in Boston, USA.

“Professor Collis has taught at Harvard Business School for the past 30 years. He is on the faculty of several Harvard Business School Executive Education programs and a best-selling author.

The AFG Academy course is structured in the Harvard Business School case study method, which immerses students in a hands-on intensive format that will enable our brokers to garner practical knowledge that can then be applied to their own businesses.

“The commitment required to complete the course is high. With weeks of pre-reading and 3 days of on-site lectures, collaborative group sessions and intensive tasks, attendees will be expected to be challenged by the experience.

AFG brokers invited to attend are leaders who are managing growing businesses. “AFG’s size and market share means we are a leader in our industry. We take this responsibility seriously and we want to help the brokers who partner with us to be the best they can be.

In line with Combined Industry Forum recommendations, AFG included quality measures that demonstrate the provision of good consumer outcomes to select the brokers invited to attend. “AFG is committed to supporting our brokers. An investment in their business performance, strategy and education delivers shared success,” he concluded.

The RBA has opted to leave the official cash rate on hold at 1.5%.

The Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5% with it now being two years since the last cash rate move. I’d like to share today’s rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.

With a combination of factors including very low wages growth, high underemployment, flattening property prices and home lending and modest inflation, many experts are predicting it may be some time before we see the next rate movement and it may actually be downwards.

Another emerging factor is lenders making ‘out of cycle’ rate increases. The term ‘out of cycle’ refers to lenders increasing rates independently of the Reserve Bank. Gone are the days when lenders relied almost entirely on customer deposits and domestic short-term borrowing, pegged against official RBA rates to fund loans. Most lenders now have much more complicated funding structures including accessing offshore wholesale and securitisation markets. Regulatory changes designed to strengthen the banking system have also seen the amount of capital lenders are required to hold increase, which means they have had to look to more expensive sources than their own balance sheets to fund loans.Even when rates are unchanged, the role of your broker remains the same. There may be different rates available from our lenders, so your broker is always on hand to ensure you have the right financial solution for your current circumstances.

We have seen around 20 lenders increase rates out of cycle recently so it is important to review your lending options regularly to ensure they remain the most suitable for your situation. There may be different rates available from our wide panel of lenders and your AFG broker is always available to ensure you have the right financial solution for your current and future circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to?get in touch with an AFG broker.

Don’t hand lending back to the big banks, AFG urges

Major banks may well be the unintended beneficiaries of any move to ban trailing commissions for mortgage products, AFG has warned.

Speaking after the release of the Productivity Commission’s final report into competition in the Australian Financial System, AFG CEO David Bailey cautioned that any move to ban trailing commissions for mortgage brokers would have the impact of consolidating the lending base of the banks, cutting competition and driving up prices.

“This is ironic given the tone of the majority of the final report. Consumers have been voting with their feet in greater numbers for over 20 years and increasingly use brokers for better service and less costly, better-suited home loans,” Mr Bailey said.

“Mortgage brokers are encouraged through trailing commission to stay with customers for the life of their loan, to review products and add value. It is in the business interest of brokers to work for their clients through the years to help them continue to gain better finance outcomes as circumstances change.

“Banning the incentive to work with customers for longer durations would have a detrimental impact on the very services that brokers help provide – greater competition.

Mr Bailey also noted that the Productivity Commission’s recommendations stood in stark contrast to the recommendations of the ASIC Remuneration Review, which gathered significant information from hundreds of thousands of lines of data and found no reason to remove trail commissions.

“The current structure is not broken. The removal of trail will simply hand more power to the major banks and non-major lenders and consumers will pay the price.

“Since the ASIC Broker Remuneration Review, our industry has come together to address the recommendations from the data-driven ASIC report,” he said. “Excellent progress has been made and a good consumer outcome has been defined. All members of the Combined Industry Forum are actively engaged in addressing the proposals raised by the regulator.

“In light of this progress, momentum-based decisions which ignore the full ramifications of such a move need to be carefully considered.

He added that maintaining a flexible, competitive environment meant that brokers filled vital roles in areas that the banks had vacated: helping vulnerable customers, first home buyers and those with complex borrowing needs.

“Providing assistance in these areas takes a lot of time – time that the bigger lenders are often not prepared to give,” he said.

AFG provided the Productivity Commission with evidence of the savings brokers make for their customers through ongoing contact over the life of a loan. “It is disappointing the Productivity Commission did not give sufficient weight to this evidence and we invite them again to spend time with some AFG brokers to understand the value a demonstrated level of contact with a customer can deliver.

“The ASIC Review was a significant piece of work spread over an 18-month time period and did not identify evidence that remuneration by commission led to detrimental outcomes for consumers. Our stance has always been that brokers add to a competitive industry working in the interests of consumers,” he said.

He also referred to a recent Deloitte report into the economic benefits of the broker channel which found, among other things:

  • Mortgage brokers strengthen the entire Australian mortgage lending industry by fostering competition and therefore supporting all Australian home buyers and investors.
  • The mortgage broker channel has contributed to a fall in lenders’ net interest margins of more than three percentage points over the past 30 years.
  • Mortgage brokers drive competition by improving access to lenders that are not major banks or their affiliates. The share for these lenders increased from 21.4 per cent in 2013 to 27.9 per cent in just four years.
  • The mortgage broking industry contributes $2.9 billion to the Australian economy each year, supporting more than 27,100 (full-time equivalent) jobs.
  • A mortgage broker’s business depends upon delivering a good outcome for their clients- more than 70 per cent of their business is referred from existing customers.

“The last thing Australian consumers deserve is higher prices for lending products and less competition where banks can drive up costs for existing customers,” Mr Bailey concluded. “We can’t afford to jettison 20 years of competitive experience without giving regard to the findings of other reviews and ensuring a stable, dynamic, customer focused lending environment remains.”