National non-bank lender Homeloans Ltd will continue eyeing acquisition opportunities and cutting costs to protect earnings after reporting a 13 per cent drop in first half profit.
Statutory net profit for Australia's biggest listed non-bank lender reached $3.8 million for the six months to December 31, 2011, down 13.3 per cent on a year earlier.
Interim revenue was $34.4 million, or 13.2 per cent lower than the previous corresponding period, largely due to reduced lending volumes and a 13 per cent drop in net fees and commission income.
But Homeloans' board kept the interim dividend at 2.5 cents per share, fully franked, and unchanged on a year earlier.
Cost cutting during the first half reduced operating expenses by 15 per cent which offset the impact of lower revenue, and executive chairman Tim Holmes said this would continue for the rest of 2011/12.
"The cost rationalisation achieved by Homeloans in recent times has been critical in maintaining our earnings profile and improving operating effectiveness amidst numerous external challenges," he said in a statement.
Homeloans said its earnings have stabilised during the first half, with the interim net profit around $100,000 higher than its second half 2010/11 net profit.
More cost cutting will help it consolidate its position during the second half of 2011/12, the company said.
Homeloans will also eye acquisition opportunities and expects more consolidation within the banking and non-bank sectors.
"We expect to see further consolidation within the second tier and non-bank sector and, as such, Homeloans is actively looking for acquisition opportunities," Mr Holmes said.
Homeloans is well placed to act on any opportunities that arise which represent a good fit with its business model, he added.
Shares in Homeloans were two cents, or 3.51 per cent, stronger at 59 cents by 1220 AEDT.
