How Liberty Financial Group Achieved Record $3.1B Loan Originations and 12% Profit Growth
Liberty Financial Group has reported a robust 12% increase in underlying NPATA to $82.3 million for the half year ending December 2025, supported by record loan originations and a strong balance sheet. The acquisition of Moula is set to accelerate unsecured SME lending, while cost efficiencies and moderating credit risk underpin improved financial metrics.
- 12% rise in underlying NPATA to $82.3 million
- Record loan originations of $3.1 billion driven by borrower demand
- Cost to income ratio improved to 26.4% through effective cost management
- Lower impairment expenses reflecting moderating credit risk
- Acquisition of Moula to expand unsecured SME lending portfolio
Strong Profit Momentum and Loan Growth
Liberty Financial Group has delivered a solid half-year performance for the six months ending December 2025, with underlying net profit after tax and amortisation (NPATA) rising 12% to $82.3 million. This growth was underpinned by record new loan originations of $3.1 billion, a 35% increase from the previous half, reflecting improved borrower demand across residential, secured, and financial services segments.
The company’s net revenue also increased by 3% to $310.8 million, supported by stable net interest margins and higher fee and commission income driven by increased transaction volumes. Despite a slight dip in net interest margin to 2.47%, Liberty maintained its industry-leading position through positive funding market conditions and effective pricing strategies.
Operational Efficiency and Credit Quality
Liberty’s cost to income ratio improved to 26.4%, down 90 basis points from the prior half, reflecting disciplined cost management and stable operating expenses despite higher loan origination activity. The average full-time equivalent staff count decreased slightly, contributing to personnel cost savings.
Importantly, impairment expenses halved to 5 basis points, signalling moderating credit risk amid a more favourable economic environment. Delinquency rates improved, with early- and late-stage arrears declining as customers leveraged lower interest rates to reduce arrears. The acquisition of Moula, a specialist unsecured SME lender, added some incremental delinquency but is expected to diversify and strengthen Liberty’s lending portfolio.
Balance Sheet Strength and Strategic Outlook
Liberty’s balance sheet remains robust, with financial assets growing slightly to $14.8 billion and an investment-grade BBB rating reaffirmed by Standard & Poor’s. The company reported a cash return on equity of 13.8%, reflecting efficient capital deployment and strong profitability.
The acquisition of Moula is a strategic move to accelerate growth in unsecured SME lending, complementing Liberty’s existing secured and residential finance offerings. Management highlighted ongoing investments in digital customer solutions and automation to sustain operational efficiency and enhance service delivery.
Looking ahead, Liberty anticipates that rising interest rates may pose some challenges to delinquency trends, but favourable funding markets and continued peer outperformance in key metrics like net interest margin and cost to income ratio should support ongoing profit growth.
Bottom Line?
Liberty’s strong half-year results and strategic acquisition position it well for growth, but rising rates warrant close monitoring of credit quality.
Questions in the middle?
- How will the Moula acquisition impact Liberty’s credit risk profile over the next 12 months?
- Can Liberty sustain its net interest margin advantage amid evolving funding conditions?
- What are the company’s plans for capital management and distribution in a rising rate environment?
