How Is AFG Driving 21% Profit Growth and Setting Bold FY29 Targets?

Strong Financial Performance in FY25

Australian Finance Group Ltd (AFG) has delivered a compelling financial performance for the year ended 30 June 2025, reporting a 21% increase in net profit after tax to $35 million. Underlying net profit, before amortisation, rose by 13% to $40.8 million, underscoring the resilience of AFG's diversified business model amid dynamic market conditions.

The company’s disciplined capital allocation and strategic investments in technology have been pivotal in driving growth across its core segments. The Distribution segment saw earnings rise by 10%, while the Manufacturing segment, which includes AFG Securities, experienced a remarkable 53% increase in earnings, reflecting strong demand and operational efficiency.

Expanding Broker Network and Technology Enhancements

AFG’s broker network has grown to over 4,200 active brokers, representing approximately one in six brokers across Australia. This expansion has been supported by technology upgrades, notably the BrokerEngine Plus platform, which has achieved a near 50 Net Promoter Score, indicating high broker satisfaction and engagement.

The company’s strategic acquisition of Fintelligence in late 2024 and the launch of its Broker Investments program mark significant steps toward diversifying earnings and strengthening broker partnerships. These initiatives are expected to contribute positively to earnings in FY26 and beyond.

Securitised Lending and Market Position

AFG Securities, the company’s securitised lending arm, reported a 53% increase in earnings to $16 million, supported by a $1 billion upsized Residential Mortgage-Backed Securities (RMBS) transaction with strong investor demand. The RMBS program plays a critical role in fostering competition by providing smaller lenders with access to funding, thereby supporting affordability and choice for borrowers.

AFG continues to advocate for a government-backed RMBS scheme, which could further enhance market competition and financial system resilience. The company’s non-bank lending flows to smaller lenders stood at 11.6% in FY25, maintaining momentum into the first quarter of FY26.

Record Q1 FY26 and Ambitious FY29 Outlook

AFG kicked off FY26 with record residential mortgage lodgements of $30.6 billion, a 26.5% increase year-on-year. Investor loans accounted for 36% of lodgement flows, up from 32% the previous year, reflecting rising investor demand amid tight rental markets and high home values.

Looking ahead, AFG has set ambitious FY29 targets, including growing the AFG Securities loan book to $9 billion and achieving a long-term net interest margin of 120 basis points. The company’s confidence is anchored in its scalable platform, technology investments, and deep broker relationships, positioning it to capitalize on ongoing market opportunities.

Governance and Shareholder Support

At the AGM, shareholders overwhelmingly supported key resolutions, including the adoption of the remuneration report and the re-election of directors Jane Muirsmith and Annette King, reflecting strong governance and investor confidence in AFG’s leadership and strategic direction.