AFG Posts Record FY25 Growth Amid Broker Expansion and Tech Gains
Australian Finance Group (AFG) reported a robust FY25 with record broker recruitment, loan book growth, and earnings, driven by technology adoption and diversified products. The company signals a positive outlook for FY26 amid expected cash rate cuts and market momentum.
- EBITDA up 19% to $56.2 million, NPAT rises 21% to $35 million
- Broker network expands by 200 recruits, with 58% writing multiple product classes
- AFG Securities loan book grows 23%, net interest margin improves to 116bps
- 50% adoption of BrokerEngine Plus platform enhances broker services
- Strong credit quality maintained with prudent capital management
Record Growth Fueled by Broker Network Expansion
Australian Finance Group (AFG) has delivered a standout FY25 performance, underscored by record broker recruitment and loan volume growth. The company’s broker network grew by 200 new recruits to a record 4,200 brokers, with 58% now writing multiple product classes, reflecting a strategic push towards diversification. This expansion has helped AFG capture an increasing share of the Australian residential mortgage market, where brokers now account for nearly 80% of originations.
Financial Performance Highlights
AFG’s earnings momentum accelerated in the second half of FY25, with EBITDA reaching $31 million, a 26% increase over the first half. For the full year, EBITDA rose 19% to $56.2 million, while reported net profit after tax (NPAT) climbed 21% to $35 million. Distribution segment revenues grew 10% to $68 million, supported by a 23% increase in the AFG Securities loan book, which now stands at $5.5 billion. The net interest margin improved to 116 basis points, benefiting from cash rate reductions in the latter half of the year.
Technology and Diversification Drive Competitive Edge
Technology adoption remains a cornerstone of AFG’s strategy, with 50% of brokers now using the BrokerEngine Plus platform. This digital tool has enhanced broker efficiency and satisfaction, contributing to $2 million in annual efficiency gains. Additionally, AFG’s diversified product offering beyond traditional residential mortgages; including commercial loans, asset finance, and personal loans; now accounts for 75% of earnings, underscoring the company’s successful pivot to a broader financial services model.
Maintaining Credit Quality and Capital Discipline
Despite rapid growth, AFG has maintained strong credit quality, with arrears improving and cumulative losses over 15 years remaining negligible. The company prudently increased its expected credit loss provisions in line with book growth. Capital management remains disciplined, with a focus on balancing reinvestment in growth initiatives and returning surplus capital to shareholders. A fully franked final dividend of 5.3 cents per share was declared, reflecting confidence in ongoing earnings stability.
Positive Outlook Supported by Market Tailwinds
Looking ahead, AFG is optimistic about FY26, buoyed by expected cash rate cuts that should stimulate residential and commercial credit growth. July 2025 saw record residential lodgements, up 25% year-on-year, signaling strong market momentum. The company’s integrated broker services, technology investments, and strategic acquisitions position it well to capitalize on ongoing industry consolidation and evolving broker needs.
Bottom Line?
AFG’s FY25 results set a strong foundation for growth, but investors will watch closely how it navigates competitive pressures and market shifts in FY26.
Questions in the middle?
- How will AFG sustain broker recruitment and retention amid industry consolidation?
- What impact will further cash rate cuts have on AFG’s net interest margins and loan book growth?
- Can technology investments like BrokerEngine Plus continue to drive efficiency and broker loyalty?
