Company reports 22% increase in broker volumes
COG Financial Services Limited, the largest asset finance distributor in Australia, has reported impressive growth in volumes over the past 12 months.
Despite challenging market conditions, COG has managed to bolster its offerings and support for brokers, resulting in robust broker volumes of $7.7 billion, an increase of 22%, or $1.4 billion.
“We’re very pleased with this growth rate, and attribute it to two key drivers: the increase in broker members and, more importantly, the growth of our members’ own businesses,” said Mark Rayson (pictured above left), head of COG aggregation. “To put that into perspective, on our estimates, in FY23 COG members settled approximately 23% of all asset finance in Australia, and more broadly they arranged finance for 12% of the total equipment, plant and machinery CAPEX.”
Commercial volumes for COG posted a noteworthy 19% growth during the financial year. Despite mature market conditions, commercial activity remained resilient due to tax incentives for commercial equipment purchases. However, interest rate rises have posed challenges, as commercial customers have become more focused on obtaining competitive rates.
“Commercial activity has been very resilient to the interest rate rises, which suggests a two-speed economy. Tax incentives for commercial equipment purchases, which ceased at the end of June, has partially driven demand last financial year,” Rayson said. “Despite a strong level of demand, we have definitely seen our commercial customers become more focused on interest rates which has made it a challenging time for our brokers.”
At the consumer level, COG recorded a substantial 24% growth in volume.
“It’s certainly been an interesting and rapidly evolving time for this sector,” says Damian Mantini (pictured above right), head of strategic partnerships. “Consumer purchases are often more discretionary and therefore more sensitive to rate increases. And if you compare this financial year with last, the use of unsecured personal loans has changed dramatically. Last year, the primary purpose was for home renovations, whilst this financial year it has gone towards debt restructuring to lower customers’ outgoings or assist with mortgage serviceability.”
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To further expand its consumer offerings, COG recently acquired NFC and United Financial Services (UFS) aggregation businesses. This strategic move allows COG to consolidate its position in the retail sector and become the top asset finance aggregator. The acquisition strengthens COG's relationship with funders and ensures that brokers have access to the best product propositions available.
Despite these positive results, COG acknowledged the headwinds and challenges faced by the market.
“We know we have to be agile and confront them as needed,” Martini said. “We also know that as the market becomes more challenging, brokers require the broadest range of options so they can access every opportunity. And they need the certainty that they’re getting the best options available for their clients.”
One of the challenges faced by COG is the ongoing stock supply constraints, particularly for new cars. To address this, COG acquired its car buying business to support brokers by offering regular stock drops and helping clients find vehicles that are currently in stock.
In addition to expanding its consumer offerings, COG has also expanded its member-exclusive lender Westlawn Finance. This move enhances its existing lending panel and provides brokers with an additional option and competitive advantage over their rivals.
“Over the past year, the additional scale we have created via organic growth and acquisition gives us the means to make the additional investment that our brokers and funders require – across key areas including systems, automation and security,” Rayson said. “Our profession is becoming more complex each year, and we have an important role in ensuring there are specialist asset finance solutions available, to complement brokers’ expertise, maximise their efficiency, and minimise their risk.”
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