Australian Finance Group Ltd (AFG) has reported a record-breaking half-year profit for HY26, driven by strong broker network growth and improved funding terms that reduce cash rate sensitivity.
- Net profit after tax surges 46% to $22.4 million
- Broker network expands to 4,300, writing 1 in 9 home loans nationally
- AFG Securities loan book grows 24% to $6.3 billion with improved net interest margin
- Secures $1.2 billion term funding at favourable pricing, reducing cash rate risk
- Technology adoption and subscription income continue double-digit growth
Record Half-Year Performance Signals Strength
Australian Finance Group Ltd (ASX, AFG) has delivered a standout performance for the six months ending 31 December 2025, posting a 46% jump in net profit after tax to $22.4 million. This surge underscores the company’s growing dominance in the Australian mortgage broking and lending sector, supported by a 16% rise in underlying gross profit and a 43% increase in EBITDA.
AFG’s return on equity climbed to 21%, reflecting the resilience and quality of its earnings base, which now sees 74% of income generated from annuity-style revenue streams. The company’s disciplined approach has also driven efficiency gains, lowering the cost-to-income ratio to 56%, a notable achievement in a competitive market.
Expanding Broker Network and Market Reach
Central to AFG’s success is its expanding broker network, which now includes 4,300 active brokers writing one in every nine home loans nationally. The group added over 90 new broker groups during the half, reinforcing its position as a critical intermediary between borrowers and lenders in Australia’s structurally growing lending market.
CEO David Bailey emphasised the strategic importance of the broker channel, highlighting ongoing investments in broker partnerships and technology platforms. The Broker Investment program, which has completed five strategic investments to date, is already delivering earnings growth and expanding AFG’s footprint.
Technology and Funding Innovations Drive Growth
Technology adoption remains a core pillar of AFG’s growth strategy. The BrokerEngine Plus platform saw a 23% increase in users, now serving 4,100 brokers with enhanced workflow tools. Subscription income rose 11% to $11.2 million, marking eight consecutive years of growth and diversifying the company’s revenue streams.
On the funding front, AFG secured $1.2 billion in term funding at favourable pricing in February, significantly reducing its sensitivity to cash rate fluctuations. This improved funding environment supported a 24% increase in AFG Securities’ loan book to $6.3 billion and an 11 basis point rise in net interest margin to 124 basis points.
Looking Ahead, Sustainable Growth and Value Creation
AFG’s momentum has carried into the second half of FY26, with record January lodgements and a robust pipeline of business. The company’s focus on disciplined execution, technology investment, and broker support positions it well to capitalise on the growing preference for mortgage brokers in Australia’s lending market.
David Bailey concluded that AFG’s strong balance sheet, high cash conversion, and diversified income streams underpin its long-term growth ambitions. With a fully franked interim dividend of 4.7 cents per share declared, the company is signalling confidence in its sustainable value creation strategy.
Bottom Line?
AFG’s record half-year results and strategic funding moves set the stage for sustained growth amid evolving market dynamics.
Questions in the middle?
- How will AFG manage potential interest rate volatility despite improved funding terms?
- What are the risks and opportunities associated with AFG’s broker group investments?
- How might continued technology adoption reshape AFG’s competitive positioning?