Pandemic bounce back drives record performance
Commercial finance settlements grew substantially in FY22, driven by increased demand from businesses following the COVID-19 pandemic, Connective has revealed.
Unveiling its FY22 results which cover the year to June 30, the aggregator reported commercial finance settlements of $9.06bn, representing a rise of 90% year-on-year.
Total loans settled across its residential, asset finance and commercial businesses reached a record $95.5bn, up 40% year-on-year. The results reflected strong demand for home loans, driven by a low interest rate environment and an increase in businesses wanting finance to invest in growth strategies, Connective said.
Residential settlements reached $83.5bn over the financial year, an increase of 36% year-on-year, Connective said. Asset finance settlements topped $2.9bn, up 39% year-on-year.
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Despite rising interest rates and price rises in areas such as construction, fuel and grocery items, with annual inflation at 6.1% in the June quarter, Connective brokers settled $7.52bn in residential loans over June 2022, up 10% compared to $6.82bn over June 2021, the aggregator said.
Over the financial year, Connective said it boosted its workforce by 18.5%, bringing in skilled employees to work across its broker support, technology and compliance functions.
Connective CEO Glenn Lees (pictured above left) said the aggregator was “delighted” to see another successful year for members working across residential, commercial and asset finance lines of business, building on the momentum achieved in FY21.
Investment in people, technology and product development enabled Connective to support members to achieve the results, he said.
“By supporting members – whether it’s through marketing or compliance support or through insights and education – we’re helping them deliver great client outcomes and grow their business,” Lees said. “As economic uncertainty grows and the broker market becomes more competitive, we’ll be stepping up our support for members to ensure their ongoing success.”
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Commenting specifically on growth in commercial and asset finance, head of Connective asset finance Brent Starrenburg (pictured above right) told MPA the aggregator had seen increased demand for vehicles and equipment from businesses wanting to expand or upgrade their assets following the COVID-19 pandemic.
Demand was supported by government incentives, such as the instant asset write-off scheme, and supply chain issues which resulted in businesses seeking funding for goods that cost more, he said.
“In terms of consumer lending, we’ve experienced greater demand for finance of leisure goods such as caravan and boating as Australians looked to holiday domestically instead of travelling overseas.”
Starrenburg said higher loan volumes were also driven by growth within Connective’s asset finance team.
“Specialist asset finance brokers recognise the value of partnering with Connective because we offer the support and systems to help them take their business to next level,” Starrenburg said.
The aggregator also noted growth in total settlements mirrored the MFAA’s March figures, showing mortgage brokers facilitated 69.5% of all residential home loans.
