Resimac expands loan book and raises ordinary dividends in FY26

Home loans drive stronger FY26 earnings

Resimac Group Ltd (ASX:RMC) finished FY26 with a larger loan book, stronger margins and a markedly bigger profit, giving the non-bank lender room to raise its ordinary dividend despite a difficult lending environment. Normalised net profit after tax rose 26% to $49.9 million, while statutory NPAT attributable to the parent’s ordinary shareholders increased 42% to $49.2 million. The consolidated accounts report profit after tax of $49.3 million, including $126,000 attributable to a non-controlling interest.

The main engine was residential lending. Home loan settlements climbed 20% to $5.9 billion and home loan assets under management reached $14.7 billion, up from $13.4 billion. Total AUM, including asset finance, reached a record $16.5 billion. The figures build on the strong FY26 profit result, which previously highlighted the same 42% statutory profit increase and higher final dividend.

Margins and funding improve as costs rise

Resimac’s net interest income increased 13% to $192.7 million even though interest income slipped 1% to $1.05 billion. Lower interest expense, improved funding economics and higher average home loan balances helped lift normalised operating profit 18% to $92.9 million. The normalised cost-to-income ratio edged down to 53.0% from 53.6%, as revenue growth outpaced a 16% increase in normalised operating expenses.

Funding remains central to that equation. Resimac issued $5.5 billion of RMBS and ABS during the year, while reporting lower funding margins and a five-basis-point improvement in net interest margin to 159 basis points. The year’s funding activity included a A$1 billion prime mortgage bond, part of a securitisation program whose cumulative bond issuance has now exceeded $56 billion. The company says all warehouse facilities were renewed on or before maturity and that it remained compliant with its corporate debt covenants.

Asset finance shifts towards returns over volume

Asset finance presented a more complicated picture. Reported AUM fell 28% to $1.8 billion as the acquired Westpac Auto portfolio continued to run off, while settlements declined 11% to $0.8 billion. Underlying Resimac-originated asset finance AUM nevertheless rose 7% to $1.5 billion, and management said it was directing new business towards segments with better risk-adjusted returns. The portfolio’s margin improved by 13 basis points.

Credit costs also moved in the right direction overall, with loan impairment expense falling 5% to $21.4 million. That headline masks a heavier provisioning burden in asset finance: the asset finance expected credit loss allowance rose to $30.7 million from $21.2 million, while the home loan allowance increased more modestly to $38.1 million. The group’s total allowance was $68.8 million against $16.5 billion of loans and advances, with management retaining overlays for macroeconomic uncertainty and emerging arrears pressure.

Higher dividends, but ASIC case remains unresolved

The Board declared a fully franked final dividend of 6.0 cents per share, taking FY26 ordinary dividends to 10.0 cents per share, up from 7.0 cents. Including the 9.0-cent special dividend paid in March, total FY26 distributions reached 19.0 cents per share, or $75.2 million. The final dividend’s record date is 4 September 2026 and payment is scheduled for 18 September 2026.

That capital return sits alongside an unresolved conduct matter. ASIC commenced civil penalty proceedings in May 2025 alleging breaches relating to Resimac’s systems and procedures for handling hardship notices under the National Consumer Credit Protection Act. The matter remains before the court, and the annual report does not disclose a potential penalty or provision because the relevant recognition criteria were not met. It is the most immediate counterweight to an otherwise positive earnings narrative.

Climate reporting identifies future funding exposure

Resimac’s first report under AASB S2 identified two principal climate-related risks: extreme weather affecting collateral and borrowers, and changing sustainability expectations from wholesale funding providers and investors. The company assessed the anticipated financial effects as non-material across the short, medium and long term, although it acknowledged that funding costs or access could become less favourable if investor mandates evolve. About 56% of securitisation funding came from investors outside Australia at year-end.

Resimac has not yet set a climate transition plan or climate-related targets, and Scope 3 emissions were excluded under the first-year reporting relief. For FY27, the practical test is whether investment in home loan growth, data, automation and artificial intelligence can continue to lift returns while asset finance provisioning, funding scrutiny and the ASIC case remain live constraints.