Australian Finance Group has announced it is offering to take a non-controlling equity stake across its network of mortgage broking businesses.
Australian Finance Group has announced it is offering to take a non-controlling equity stake across its network of mortgage broking businesses.
The group’s chief executive David Bailey said the West Perth-based company had a strong balance sheet it was looking to use to take equity positions in well-run growth-minded broker businesses.
“It’s only natural given how established the industry now is, that demographics are changing, and through AFG investing in its brokers’ businesses we are helping to facilitate succession planning for some and expansion for others,” he said.
The group recently appointed former Steadfast Group general manager of operations and acquisitions and BDO senior manager Vik Sukumaran to lead the newly minted broker investments team.
Mr Bailey said the group’s brokers were seeking assistance to expand growth.
“Every day AFG staff work with our broken network to help them build their businesses,” he said.
“As small business operators, access to funding for business expansion or forward planning for an eventful retirement, can prove challenging.
“We have listened to these requests, and it has led us to offer a solution whereby AFG would invest in the business, taking a non-controlling equity position, providing that surety of funding, along with additional expertise to support the growth of their businesses.”
He said there was no obligation for brokers within the group’s network to participate – and that the value proposition for all brokers would remain the same, regardless of AFG’s shareholder status.
‘Our unwavering commitment to broker and high-quality offering of products and services will remain consistent for all member brokers,” he said.
Research from the Mortgage and Finance Association of Australia found more than seven out of 10 borrowers in Australia sought out the services of a mortgage broker.
During the June 2024 quarter, mortgage brokers wrote 73.7 per cent of all new home loans, the second highest result on record and a 6.5 percentage point increase from the same quarter the year prior.
That figure was up from 57 per cent in April 2020.
“Australians are living through a cost-of-living crisis with every dollar counting in household budgets,” MFAA chief executive Anja Pannek said.
Throughout the June 2024 quarter, the value of home loans settled by mortgage brokers surged $18.64 billion, exceeding $100 billion nation-wide for the first time since records began in 2012.
MFAA’s data was backed by NAB, which revealed in its FY24 half year results that 64.9 per cent of the $39 billion in new Australian home loans were lodged by brokers – up six per cent on the year prior.
AFG has eight offices across five Australian states, employing over 300 people and supporting over 4000 brokers.
The group settles more than $60 billion in mortgage, asset finance, and commercial finance annually.
