Growth in motor, SME, SMSF lending offsets softer residential portfolio, though Labor’s Budget changes spark forward-looking caution
Non-bank lender Liberty’s loan book expanded through its 2026 financial year, but the mix underneath tells a more complex story: secured lending did the heavy lifting while the residential mortgage portfolio shed volume, continuing a shift that's been building across the year.
Liberty wrote $6.1 billion in new loans across the group for the year – 20% ahead of the prior year's total – but the split between products has become increasingly lopsided.
Secured lending, which spans motor vehicle, commercial and self-managed superannuation fund (SMSF) finance, was the standout, with originations in that book climbing nearly 50% year on year.
Residential origination volumes also grew year over year, albeit at a much softer 25%, and weren’t enough to arrest the decline in the size of the mortgage book itself, which dipped from $7.75 billion to $7.67 billion.
Earlier this year, Liberty chief executive James Boyle (pictured) conceded that the residential run-off rate was “beyond our preferences”.
But Liberty's diversification push, which includes the acquisition of SME lender Moula, has been the group’s champion amid a softening of the Australian residential housing market.
Budget changes cloud SMSF story
That secured growth engine comes with an asterisk.
Labor's Federal Budget deal with the Greens has banned SMSFs from using limited recourse borrowing arrangements (LRBAs) to buy residential property.
Liberty was among the non-bank lenders that publicly pushed back on the ban, arguing SMSF borrowers are typically far more conservatively geared than assumed.
Liberty flagged in today’s results that the changes "will result in reduced residential SMSF originations in future periods”.
Boyle nonetheless pointed to the group's diverse offering as a buffer heading into the next financial year: "Recently announced budget measures along with continued geopolitical and interest rate uncertainty has impacted consumer confidence," he said. "Nevertheless, having a diverse range of customer solutions places us in a position to be able to continue to deliver for customers and securityholders in FY27."
Profit growth holds up
Boyle drew attention to Liberty’s “disciplined” profit growth over the past two financial years, “including a 7% growth rate in NPATA (net profit after tax and amortisation) for the year ended 30 June 2026.”
He added: “This positive result was achieved by increasing the loan portfolio, expanding NIM and retaining strong cost discipline. We were able to achieve profit growth in an increasingly competitive lending environment and continuing interest rate and cost of living uncertainty for customers.”
Overall, Liberty's full-year numbers were solid rather than spectacular: statutory profit rose a moderate 7.8% for the year, a reasonably stable result given the mix shift underway.
Split across the two halves the pattern was less even, with the first six months delivering strong profit growth on the prior corresponding period, before momentum eased considerably in the second six-month period.
Liberty’s Financial Services segment – which includes mortgage aggregation subsidiaries nMB and Liberty Network Services (LNS) – saw its net annual margin rise from $52.7 million to $63.6 million.
