How Resimac’s Auto Finance Push Fueled a 13% Profit Surge in FY25

Strong Financial Performance Despite Headwinds

Resimac Group Ltd (ASX, RMC) has delivered a robust financial performance for the full year ended 30 June 2025, reporting a 13% increase in operating profit to $78.6 million. This growth was underpinned by a 14% rise in assets under management (AUM) to $15.9 billion, reflecting both organic growth and strategic acquisitions. However, the company’s normalised net profit after tax (NPAT), which excludes fair value movements on derivatives, fell 8% to $39.7 million, primarily due to a notable increase in impairment expenses.

The statutory NPAT showed a more modest decline of 1% to $34.6 million, indicating that while profitability remains solid, the company is navigating some asset quality challenges.

Asset Finance Growth Accelerated by Westpac Acquisition

A standout feature of Resimac’s FY25 results was the dramatic expansion of its asset finance portfolio, which more than doubled with a 127% increase to $2.5 billion. This surge was largely driven by the acquisition of Westpac’s auto finance and novated leasing portfolio in March 2025, a move that CEO Pete Lirantzis described as a “significant milestone” enhancing portfolio diversification and positioning Resimac for further growth in this segment.

Home loans also grew steadily by 4% to $13.4 billion, contributing to the overall AUM increase. Origination and application volumes both rose by 14%, underscoring sustained demand across Resimac’s lending channels.

Operational Costs and Impairment Expenses Impact Margins

While net interest margin (NIM) remained broadly flat, the company experienced a 50 basis point increase in its cost-to-income ratio, reaching 53.6%. This was attributed to higher expenses associated with integrating and servicing the newly acquired consumer auto portfolio. Impairment expenses rose to $22.6 million, with collective provisioning increasing by $4 million and net write-offs up by $10.7 million, signaling some pressure on asset quality that investors will want to monitor closely.

Dividend Maintained Amid Strategic Transition

Resimac declared a fully franked final dividend of 3.5 cents per share, consistent with the prior year’s interim and final dividends. Including the special dividend of 12 cents per share paid in June 2025, total dividends for FY25 amounted to 19 cents per share, reflecting the company’s commitment to returning capital to shareholders despite the challenging environment.

New Leadership Sets Strategic Priorities for FY26

Since his appointment as CEO in April 2025, Pete Lirantzis has initiated a strategic review to align the Group’s direction with evolving market conditions. His focus for FY26 includes enhancing the broker and customer experience, leveraging automation, expanding the core mortgage product suite, and strengthening security and governance frameworks. These initiatives aim to sharpen Resimac’s competitive edge and support sustainable long-term growth.

Lirantzis emphasized the importance of balancing growth with risk management, particularly as the company integrates its expanded asset finance portfolio and navigates a complex lending environment.